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David McGill Blogger

The ABC's of ABN's

Posted by David McGill | April 03, 2014

Let's cut to the chase: here are the 5 things you need to know about ABNs.

1. What's the purpose of an ABN?

Medicare created ABNs as a patient protection tool. The ABN allows your Medicare patients to decide whether to receive certain items from you when they might have to pay for them because Medicare doesn't. 

From your perspective as a supplier, the ABN proves that your patient knew that Medicare might not pay for the service before you delivered the item to her. This is important because failure to issue a valid ABN to Medicare beneficiaries prevents you from billing them for those items. 

2. When should I issue an ABN?

There are 2 main scenarios when ABNs are appropriate, one mandatory, the other discretionary. First, you must give your patient an ABN when you believe Medicare may deny an item it usually covers but that may not be medically reasonable and necessary in a specific instance. 

For example, assume you have a patient who insists on a new orthosis even though the one he's currently using is still within the Medicare-defined "reasonable useful life." You would have reason to believe that Medicare will deny that claim, even though it does generally cover that item. The ABN would permit you to bill the patient for that orthosis.

Second, though not mandatory, using the form when delivering something that Medicare never covers provides your patient clear notification of their financial liability. This avoids potentially nasty conflicts that can result in material disruptions to your business. 

For example, if you wanted to deliver a heel height-adjustable prosthetic foot to your patient, you could choose to use an ABN to bill them directly for L5990, a code that Medicare never pays for per the LCD.

3. You Can't Use ABN's Routinely

To use an ABN, you have to first make sure that you have a reasonable basis for thinking that Medicare will not cover the item. Every ABN you issue has to satisfy this requirement. Stated another way, you should examine each and every ABN on a case-by-case basis. Make sure you have a reasonable ground for believing that Medicare will deny the item.

NOTE: Medicare's prohibition on routine ABN use does not apply to services that are always denied for medical necessity. There, you can issue ABN's routinely.

4. Paper Copies Always Required

Regardless of whether the patient signs the ABN electronically or on paper, you must give her a paper copy of the executed form. 

5. My Patient Did a 180 - What Should I Do?

Your patient signs an ABN but changes his mind a day later. What do you do?

In this scenario, you need to present the previously-completed ABN to the patient and ask him to annotate it. The annotation must (a) clearly indicate his new option selection, (b) be signed, and (c) be dated. You have to provide a copy of the annotated ABN to the patient as soon as possible.


Don't mess up the ABC's of ABNs. These forms provide important clarity about who's responsible for what, financially. When used correctly, they prevent you and your patients from getting into fights about money - "I didn't know I had to pay for that!" - so that you can focus on what really matters: providing them high-quality health care. 

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