Advance Beneficiary Notice of Noncoverage (ABN) Policies and Procedures

An ABN, Form CMS-R-131, is a standardized notice doctors or their staff or designee must issue to a Medicare beneficiary before providing certain Medicare Part B (outpatient) items or services. Patt Internal Medicine may furnish elective services that the Medicare Program does not reimburse or cover. In these cases, we must give you written notice in a format that complies with Medicare regulations.

Patt Internal Medicine issue the ABN when:

  • Patt Internal Medicine believes Medicare may not pay for an item or service;
  • Medicare usually covers the item or service; and
  • Medicare may not consider the item or service medically reasonable and necessary for this patient in this particular instance.

We only provide ABNs to beneficiaries enrolled in Original (Fee-For-Service) Medicare. ABNs allow beneficiaries to make informed decisions about whether to get services and accept financial responsibility for those services if Medicare does not pay. The ABN serves as proof the beneficiary knew prior to getting the service that Medicare might not pay. If Patt Internal Medicine does not issue a valid ABN to the beneficiary when Medicare requires it, Patt Internal Medicine cannot bill the beneficiary for the service and may be required to write off the charge if Medicare doesn’t pay. Patt Internal Medicine may also use the ABN as an optional (voluntary) notice to alert beneficiaries of their financial liability prior to providing care that Medicare never covers. ABN issuance is not required to bill a beneficiary for an item or service that is not a Medicare benefit and never covered.

Medical Necessity

Medicare defines medical necessity as services that are:

  • Reasonable and necessary;
  • For the diagnosis or treatment of an illness or injury or to improve the functioning of a malformed body member; and
  • Not excluded under another provision of the Medicare Program.

Mandatory ABN Uses

Patt Internal Medicine must issue an and have a signed ABN acknowledgement when:

  • We expect Medicare to deny payment for an item or service because it is not reasonable and necessary under Medicare Program standards;
  • Medicare considers the care to be custodial care;
  • Outpatient therapy services are in excess of therapy cap amounts and do not qualify for a therapy cap exception;
  • A patient is not terminally ill (for hospice providers only); or
  • Home health services requirements are not met: for example, the individual is not confined to the home or does not need intermittent skilled nursing care (for HHA providers).

When we submit a claim that has an associated ABN, we must enter a code in the claim modifier section of the claim form to advise that we have in hand, a properly-executed ABN associated with mandatory ABN use.

Common reasons for Medicare to deny an item or service as not medically reasonable and necessary include care that is:

  • Experimental and investigational or considered “research only”;
  • Not indicated for diagnosis and/or treatment in this case;
  • Not considered safe and effective; or
  • More than the number of services Medicare allows in a specific period for the corresponding diagnosis.

What Are Medicare Coverage Policies?

Limited coverage may result from National Coverage Determinations (NCDs) or Local Coverage Determinations (LCDs). Medicare expects you to know both current NCDs and LCDs. NCDs describe whether Medicare pays for specific medical items, services, treatment procedures, or technologies. In the absence of an NCD, LCDs indicate which items and services Medicare considers reasonable, medically necessary, and appropriate. In most cases, the availability of this information indicates you knew, or should have known, Medicare would deny the item or service as not medically necessary. The Medicare Coverage Database (MCD) at http://www.cms.gov/Medicare-Coverage-Database contains all NCDs and LCDs, local policy articles, and proposed NCD decisions. You may find published NCDs at http://www.cms.gov/ Regulations-and-Guidance/Guidance/Manuals/InternetOnly-Manuals-IOMs-Items/CMS014961.html on the CMS website.  You may view official versions of LCDs by contractor, State, or alphabetically at http://www.cms.gov/Medicare-Coverage-Database on the CMS website.

Please note: Some services at Patt Internal Medicine are for prevention and wellness and therefore, deemed non-covered by the Medicare Program even though they doctor feels in her professional opinion that you may benefit from the recommended services.  The decision to proceed with the recommended services in these circumstances is between doctor and patient without expectation of coverage or reimbursement from the Medicare or other insurance program(s).

What Are Frequency Limits?

Some Medicare-covered services are subject to frequency limitations. A frequency limit means Medicare will pay for only a certain quantity of a specific item or service in a given time period for a particular diagnosis. If we believe that an item or service may exceed frequency limitations, we must issue an ABN prior to providing the item or service to a beneficiary. If we do not know the number of times the beneficiary got a service within a specific time frame, we can try to get this information from the beneficiary or other providers involved in his or her care. Otherwise, we can attempt to get authoritative guidance from our Medicare Administrative Contractor (MAC).  This guidance never guarantees payment. The MAC contact information is available at http://www.cms.gov/Research-Statistics-Data-and-Systems/MonitoringPrograms/Medicare-FFS-Compliance-Programs/Review-Contractor-Directory-Interactive-Map on the CMS website. Alternatively, we may use the Health Insurance Portability and Accountability Act (HIPAA) Eligibility Transaction System (HETS) (270/271) to determine if a Medicare beneficiary met the frequency limits from another provider during the calendar year. More information about the HETS 270/271, is available at http://www.cms.gov/Research-Statistics-Data-andSystems/CMS-Information-Technology/HETSHelp on the CMS website.

What Is the Routine Notice Prohibition?

While we understand your frustration with all the rigorous paperwork, please understand that Medicare prohibits Patt Internal Medicine from issuing ABNs on a routine basis (that is, where there is no reasonable basis to expect that Medicare may not cover the item or service). We are required to ensure a reasonable basis exists for noncoverage associated with the issuance of each ABN. As long as proper evidence supports each ABN use, we will not be at risk for noncompliance with the routine notice prohibition.

Who Issues the ABN when Multiple Entities Render Care?

When multiple entities render care, Medicare does not require us to issue separate ABNs.

Any party involved in the delivery of care can issue the ABN when:

  1. There are separate “ordering” and “rendering” providers (for example, a physician orders a laboratory test and an independent laboratory delivers the ordered tests);
  2. One health care provider delivers the “technical” component and the other the “professional” component of the same service (for example, radiological test that an independent diagnostic testing facility renders and a physician interprets); or
  3. The entity that obtains the signature on the ABN differs from the entity that bills for the service (for example, when one laboratory refers a specimen to another laboratory, which then bills Medicare for the test).

In these situations, we may enter the names of more than one entity in the header of the ABN as long as the beneficiary can clearly identify whom to contact for billing questions.

NOTE: Regardless of who issues the ABN, Medicare holds the billing entity responsible for effective issuance.

How Do We Effectively Issue an ABN?

Medicare considers issuance of an ABN effective when the notice is:

  1. Issued (preferably in person) to and comprehended by a suitable recipient;
  2. Completed on the approved, standardized ABN with all required blanks completed;
  3. Provided far enough in advance of potentially noncovered items or services to allow sufficient time for the beneficiary to consider available options;
  4. Explained in its entirety with all questions related to the ABN answered; and
  5. Signed and dated by the beneficiary or his or her representative after he or she selected one option box on the ABN.

If we issue ABNs on an electronic screen, we must ask the beneficiary if he or she prefers a paper version and issue a paper ABN if that is preferred. Regardless of whether the ABN is signed electronically or on paper, we must give the beneficiary a paper copy.

To Whom Should Patt Internal Medicine Issue an ABN?

We are required to issue the ABN to:

  • The Medicare beneficiary; or
  • The Medicare beneficiary’s representative for the purposes of getting notice under applicable State or other law.

The provider and the beneficiary must each retain one copy of the signed ABN. If we maintain Electronic Medical Records (EMRs), we may, at our discretion scan the signed hard copy for retention.

How Can Patt Internal Medicine Issue an ABN Other Than In Person?

In circumstances when issuing an ABN in person is not possible, we may issue an ABN through the following means and according to HIPAA policies:

  1. Direct telephone;
  2. E-mail;
  3. Mail; or
  4. Secure fax machine.

If we do not issue the ABN in person, we must document the contact in the beneficiary’s records.  For Medicare to consider the issuance of an ABN effective, the beneficiary should not dispute such contact. If we do not issue an ABN in person, we must follow telephone contacts immediately by either a hand-delivered, mailed, e-mailed, or faxed ABN. The beneficiary or the beneficiary’s representative must sign and retain the ABN and send a copy of the signed ABN to back to us for retention in the beneficiary’s record. We keep a copy of the unsigned ABN on file while awaiting receipt of the signed ABN. If the beneficiary fails to return a signed copy, Patt Internal Medicine will document the initial contact and subsequent attempts to obtain a signature in appropriate records or on the ABN.

The ABN consists of 5 sections and 10 blanks, which must appear in the following order from top to bottom.

Here is a sample of the ABN Form you will be asked to sign before it is completed. The letters refer to the corresponding blanks in the ABN form that both the provider and the beneficiary must complete.

Notifier(s)

  1. Patt Internal Medicine’s address, and telephone number appear at the top of the ABN.
  2. If our billing and notifying entities differ, we may give the name of more than one entity in the notifier area. However, the beneficiary must be able to identify which entity to contact for billing questions.

Patient Name

  1. The ABN must include the first and last name of the beneficiary getting the ABN. We must also use the middle initial if it appears on the beneficiary’s Medicare card.

Identification Number  

  1. This field is optional and can include an identifier such as a medical record number or date of birth.
  2. Medicare numbers, Health Insurance Claim Numbers (HICNs), or Social Security Numbers (SSNs) must not appear on the ABN.

Body

  1. We are required to list the general description of what we believe may not be covered by Medicare on the blank lines of the “NOTE.” A commonly used descriptor for this blank spaces is “Items/services.”

Table

For the table header, we generally insert the same general description language as used in the body blank referenced in the paragraph above.

  1. In the table, we must list the specific items or services we believe to be noncovered.

● For upgrades, we are required to list the excess component(s) of the item or service for which we expect a denial.
● For repetitive or continuous noncovered care, we are required to specify the frequency and/or duration of the item or service.
● For reduction in service, we must provide enough additional information so beneficiaries understand the nature of the reduction.

Reason Medicare May Not Pay

We are required to explain (in beneficiary-friendly language) why we believe Medicare may not cover each item or service.

Commonly used reasons for noncoverage are:

  1. “Medicare does not pay for this test for your condition.
  2. Medicare does not pay for this test as often as this (denied as too frequent).”
  3. “Medicare does not pay for experimental or research use tests.”
  4. “Medicare does not pay for services deemed to be amenities that are not covered for medically necessary reasons.”

NOTE: To be a valid ABN, at least one reason must apply to each item or service listed. We may apply the same reason for noncoverage to multiple items.

Estimated Costs

  1. We must completely fill in the Estimated Cost block to ensure the beneficiary receives all available information to make an informed decision about whether to obtain potentially noncovered services.
  2. We must make a good faith effort to insert a reasonable estimate for all the items or services listed. In general, Medicare expects the estimate will fall within $100 or 25 percent of the actual costs, whichever is greater.

Examples of acceptable estimates include, but are not limited to, the following:

  1. For a service that costs $250: “Between $150–$300”; or “No more than $500.”
  2. We are permitted to bundle routinely grouped multiple items or services into a single-cost estimate.

Options

We must offer you three options:

Option 1: The beneficiary wants to get the item or services at issue and accepts financial responsibility. He or she agrees to make payment now, if required. Patt Internal Medicine must submit a claim to Medicare that will result in a payment decision that the beneficiary can appeal. NOTE: If the beneficiary needs a Medicare claim denial for a secondary insurance plan to cover the service, the beneficiary should select Option 1.

Option 2: The beneficiary wants to get the item or services at issue and accepts financial responsibility. He or she agrees to make payment now, if required. When the beneficiary chooses this option, we do not file a claim, and there are no appeal rights. Patt Internal Medicine will not violate mandatory claims submission rules under Section 1848 of the Social Security Act (the Act) when it does not submit a claim to Medicare at the beneficiary’s written request.

Option 3: The beneficiary does not want the care in question and cannot be charged for any items or services listed. We do not file a claim, and there are no appeal rights. If the doctor feels strongly that in her professional opinion that the beneficiary needs this service, regardless of coverage determination, the doctor may also request that the beneficiary or his/her legal guardian or representative cooperate in the execution of an Against Medical Advice (AMA) acknowledgement.

Additional Information

Signature and Date

What if the Beneficiary Refuses to Complete or Sign the ABN?

If the beneficiary refuses to choose an option or refuses to sign the ABN, we will annotate the original copy of the ABN indicating the refusal to sign or choose an option. We may list any witnesses to the refusal on the ABN, although Medicare does not require this. If a beneficiary refuses to sign a properly issued ABN, we may decide not to furnish the item or service unless the consequences (health and safety of the beneficiary or civil liability in case of harm) prevent this option.

In general, you retain the ABN for 5 years from the date-of-care delivery when no other requirements under State law apply. Medicare requires us to keep a record of the ABN in all cases, including those cases in which the beneficiary declined the care, refused to choose an option, or refused to sign the ABN. Electronic retention of the ABN is acceptable. Patt Internal Medicine may scan the signed version of the ABN for the electronic medical record and give the paper copy to the beneficiary.

What If the Beneficiary Changes His or Her Mind?

After completing and signing the ABN, if the beneficiary changes his or her mind, we will present the previously completed ABN to the beneficiary and request he or she annotate the original ABN. The annotation must include a clear indication of his or her new option selection along with his or her signature and date of annotation. In situations where we cannot present the ABN to the beneficiary in person, we may annotate the form to reflect the beneficiary’s new choice and immediately forward a copy of the annotated ABN to the beneficiary to countersign, date, and return. In either situation, we are required to provide a copy of the annotated ABN to the beneficiary as soon as possible.

When Does Patt Internal Medicine Need to Issue Another ABN for an Extended Course of Treatment?

We may issue a single ABN to cover an extended course of treatment if the ABN identifies all items and services and the duration of the period of treatment for which we believe Medicare will not pay. If the beneficiary receives an item or service during the course of treatment that we did not list on the ABN and Medicare may not cover it, we must issue a separate ABN. A single ABN for an extended course of treatment remains valid for no more than 1 year. If the extended course of treatment continues after a year’s duration, we must issue a new ABN.

When Patt Internal Medicine May Collect Payment from the Beneficiary

A beneficiary’s agreement to be responsible for payment on an ABN means the beneficiary agrees to pay for expenses out of pocket or through any insurance other than Medicare. In accordance with Medicare regulations, Patt Internal Medicine may bill and collect funds for noncovered items or services immediately after the beneficiary signs an ABN. If Medicare ultimately denies payment, Patt Internal Medicine may retain the funds collected. If Medicare pays all or part of the claim for items or services previously paid by the beneficiary.  If Medicare finds that the ABN was not executed properly, it may find Patt Internal Medicine liable for the charge. In that case, we must refund the beneficiary the proper amount in a timely manner. Medicare considers refunds timely when made within 30 days after we receive the Remittance Advice from Medicare or within 15 days after a determination on an appeal if we or the beneficiary files an appeal.

What Claim Reporting Modifiers May Be Used?

The following are claim modifiers associated with ABN use. For specific instructions on filing claims associated with ABNs, we are guided by the “Medicare Claims Processing Manual,” Chapter 1, Section 60 at http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm 104c01.pdf on the CMS website.

  • GA Waiver of Liability Statement Issued as Required by Payer Policy, Individual Case  – We will use this modifier to report when we issue a mandatory ABN for a service as required and it is on file. We are not required to submit a copy of the ABN, but we must have it available on request.
  • GX Notice of Liability Issued, Voluntary Under Payer Policy  –  We use this modifier to report when we issue a voluntary ABN for a service Medicare never covers because it is statutorily excluded or is not a Medicare benefit. We may may use this modifier in combination with modifier GY.
  • GY Item or Service Statutorily Excluded, Does Not Meet the Definition of Any Medicare Benefit — We may use this modifier to report that Medicare statutorily excludes the item or service or the item or service does not meet the definition of any Medicare benefit. We may use this modifier in combination with modifier GX.
  • GZ Item or Service Expected to Be Denied as Not Reasonable and Necessary — We may use this modifier to report when we expect Medicare to deny payment of the item or service due to a lack of medical necessity and no ABN was issued.

For information related to your Medicare coverage, regulations, and processes, visit http://www.cms.gov/Medicare/ Coverage/CoverageGenInfo on the CMS website.