The Advance Beneficiary Notice

The Issue:

An Advance Beneficiary Notice of Non-Coverage is a written notice provided to beneficiaries that allows them to decide whether to accept delivery of an item that they might be responsible for out-of-pocket. ABN’s are frequently misunderstood and used inappropriately. Here are the ground rules around ABN’s.

What You Need to Know:

You must issue an ABN to beneficiaries before providing usually-covered items that, for some reason, are likely to be denied. Those situations are:

1. Lack of medical necessity (i.e., the beneficiary wants the device even though their clinical condition does not establish medical necessity for it);
2. Prohibited, unsolicited telephone contacts;
3. Supplier number requirements not met;
4. Medical equipment denied in advance; and
5. Non-contracted suppliers delivering off-the-shelf orthoses in a competitive bidding area.

While technically optional, it is also strongly encouraged to use an ABN when the item is not covered by Medicare (statutorily excluded or doesn’t meet a benefit requirement). In this instance, the ABN is a courtesy obligation informing the beneficiary of an impending financial obligation and you should not ask the beneficiary to sign the form or select an option box in the form. You must clearly state your reason(s) for believing that Medicare is likely or certain to deny payment on the ABN form and include an estimate of the noncovered item’s cost. ABN’s are required for both assigned and unassigned claims.

Routine use of ABN’s is generally not appropriate. For example, you cannot serially use ABN’s simply because you are unsure whether Medicare will approve claims or do not know the specific payment you will receive (e.g., when using Not Otherwise Classified codes).

What This Means for You:

First, make sure that you are using ABN’s in the 5 specific situations listed above, as it is mandatory in those instances. In addition, it is strongly recommended by Medicare that you use ABN’s when an item is excluded from Medicare coverage. Second, do not routinely use ABN’s just because you are unsure about whether the claim will get approved or the amount you will receive for it. Third, make sure you specify why you think Medicare will deny payment on the ABN form. Examples of such reasons include:

• Medicare usually doesn’t pay for this service;
• Medicare doesn’t pay for it because it is excluded from coverage (e.g., some LCD’s call out specific L-codes that are non-covered);
• Medicare doesn’t pay for this item within this period of time (e.g., “same and similar” in the bracing (orthotic) space).

Finally, make sure that you are using the current ABN form, as older forms are considered invalid. You can access the current form, which is current through June of this year here.