When Should you Issue an Advance Beneficiary Notice?

When You Must Issue an ABN (Advance Beneficiary Notice)

You must issue an Advance Beneficiary Notice (ABN) when you expect Medicare may deny payment for an item or service because:

• It is not considered reasonable and necessary under Medicare Program standards;

• The care is considered custodial;

• Outpatient therapy services are in excess of therapy cap amounts and do not qualify for a therapy cap exception;

• A beneficiary is not terminally ill (for hospice providers only); or

• A beneficiary is not homebound or there is no need for intermittent skilled nursing care (for home health services only).

Additional mandatory requirements apply to durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) suppliers. An Advance Beneficiary Notice must be issued before DMEPOS suppliers furnish a beneficiary with an item or service that will not be paid for by Medicare because:

• The provider violated the prohibition against unsolicited telephone contacts;

• The supplier has not met supplier number requirements;

• The supplier is a non-contract supplier furnishing an item listed in a competitive bidding area; or

• Medicare requires an advance coverage determination, and the beneficiary wants the item or service before the advance coverage determination is made.

Claim Reporting Modifiers:-

Modifier -GA is used to indicate that a waiver of liability statement that is required by the payer is on file.

Modifier -GX is used to describe a voluntary waiver of liability.

Modifier -GY is used to describe an item or service that is statutorily excluded or that does not meet the definition of any Medicare benefit.

Modifier -GZ is used to describe an item or service expected to be denied as not reasonable and necessary.

Why and When Should Advance Beneficiary Notice be Issued

An Advance Beneficiary Notice (ABN) is a notice that the provider must provide to a Medicare beneficiary before providing certain items or services.

• You believe Medicare may not pay for an item or service

• Medicare usually covers the item or service

• Medicare may not consider the item or service medically reasonable and necessary

for this patient in this particular instance

ABNs are issued only to those patients who are enrolled in Original Fee-For-Service Medicare.  These documents allow patients to make informed decisions about whether to receive services and to accept financial responsibility for those services if Medicare does not pay for them.  The ABN serves as proof that the beneficiary knew prior to receiving the service that Medicare might not pay for it.

This ABN can also be used as a voluntary notice to alert patients of their financial liability prior to providing medical services that Medicare never covers.  An ABN is not required to bill a patient for an item or service that is not a Medicare benefit and is never covered.

There are exceptions to this rule, however: ABNs may be routinely issued in the following circumstances:

• Experimental items and services

• Items and services with frequency limitations for coverage

• Medical equipment and supplies were denied because the supplies had no supplier number or the supplier made an unsolicited telephone contact

• Services that are always denied for medical necessity

Modifier -GA claims payment and processing

• Medicare systems will automatically deny lines submitted with the -GA modifier and covered charges on institutional claims

• Medicare systems will assign beneficiary liability to claims automatically denied when the -GA modifier is present

• Medicare will use claim adjustment reason code 50 when denying lines due to the presence of the -GA modifier

• Hospitals must issue an ABN to the beneficiary prior to providing care that Medicare may not cover because it is not medically reasonable and necessary in this particular case

• Medicare permits hospitals to bill the patient if the patient has signed a valid ABN indicating his or her choice to get the item or service and accept financial liability

• If the hospital does not issue an ABN or Medicare finds the ABN invalid, that patient may not be billed

• Hospitals may not use ABNs to charge for a component of a service when Medicare makes full payment through a bundled payment (e.g., a fluoroscopy that is bundled into an injection procedure may not be billed to the patient since its payment is included in the reimbursement for the injection)

• Medicare prohibits providers from using an ABN to transfer liability to the beneficiary when Medicare would otherwise pay for items and services

• When you issue the ABN as a voluntary notice (modifier -GX), the beneficiary does not check an option box or sign and date the notice

• The ABN is issued for items and services covered under Part B

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