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Understanding the ABN

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An ABN or Advance Beneficiary Notice of Noncoverage is a notice Medicare requires for health care providers to issue to Medicare patients as a definite way to aware them to the fact that Medicare may not pay for certain services or tests prior to having the services or tests performed in an outpatient setting. This allows the patient to make an informed decision about whether they want to receive the services and accept full financial responsibility if Medicare does not pay.

What does this mean for the provider?

According to Medicare guidelines, a provider must provide the Medicare Patient an ABN or cannot bill them for the service if Medicare doesn't cover the service.

When an ABN is issued and signed by the patient , the provider can freely bill them for the noncovered charges. When an ABN is not issued , the provider may not bill the non-covered services to the patient. It is the providers responsibility to know which services are considered not reasonable and necessary by Medicare thereby classified as noncovered.

What should be on an ABN?

There are six mandatory fields that must be filled out on an ABN to be considered valid.

  1. Health care provider's name, address and telephone number
  2. The patient name and Medicare Health Insurance Claim Number (HIC)
  3. Description of services believed to be non-covered
  4. Reason services may not be covered by Medicare
  5. The estimated cost of the services
  6. Signature of patient or patient representative and date
Remember, if any of these are missing from the ABN, the ABN is considered invalid and the patient cannont be billed for the noncovered charges.

What if the patient refuses to sign?

If a patient refuses to sign the ABN, make sure to document the ABN with this information. Unless the service is critical to the health and safety of the patient, it may be a good idea not to perform the service. If the services are performed without a valid ABN on file, the provider cannont bill the patient for the services that are noncovered in the event Medicare denies payment.

Billing Medicare

There are several requirements that need to be documented on the claim form for reporting noncovered outpatient services when billing Medicare.
  • Indicate Occurrence Code 32 and the date the ABN was signed by the patient.
  • Append Modifier GA to the appropriate procedure code(s) listed on the ABN. This allows the provider to bill the patient for these charges in the event they are denied by Medicare.
  • Append Modifier GZ to procedure code(s) not listed on the ABN that are considered by Medicare as noncovered or when no valid ABN is on file for noncovered services. Keep in mind that all line items with a GZ will automatically deny and the provider cannot bill the patient for these charges.
  • Append Modifier GX to the appropriate procedure code(s) to indicate a voluntary ABN was provided for noncovered services for which the patient is responsible for (i.e. self-administrative drugs).
  • Append Modifier GY to procedure code(s) not listed on the ABN that are considered by Medicare as noncovered for which the patient is responsible for (i.e. self-administrative drugs). Modifier GY and GX may be reported together.
  • Use these modifiers wisely. If any of these modifiers are appended to covered charges, Medicare will automatically reject the claim.

Noncovered Services

Some services that are considered noncovered by Medicare include but are not limited to:
  • Experimental procedures and treatments
  • Acupuncture
  • Chiropractic services
  • Cosmetic surgery
  • Hearing aids and services related to general hearing aid use
  • Personal care services and nursing home care unless for eligible skilled nursing care/facility
  • Housekeeping services unless eligible for hospice
  • Nonmedical services
  • Nonemergency transportation
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