Advanced Beneficiary Notice of Non-Coverage (ABN)

As providers, it is important to ensure you are paid for the work you do. There are times when care is not covered by Medicare because they deem the service not medically necessary. In these circumstances, it is vital to make sure that you communicate the likelihood that the service will not be paid for by Medicare and give your patient the option to receive these services but pay for them out-of-pocket.

This communication is called an Advanced Beneficiary Notice of Non-Coverage, or ABN. If the potential patient’s financial obligation is not communicated properly with the use of an ABN, the provider may be held financially liable for the service and payment could be denied. By using an ABN, it allows the provider to transfer the financial responsibility for the service to the patient when the provider furnishes a non-covered service.

The following are circumstances when the provider will need to issue an ABN to transfer the financial liability to the patient if the service is denied by Medicare as not medically necessary:

·      When a Medicare item or service is not considered reasonable or necessary

o  Not indicated for the diagnosis.

o  Experimental and/or investigational.

o  Exceeds the number of services allowed in a specific period for that diagnosis.

·      When providing custodial care

·      When outpatient therapy services exceed therapy threshold amounts

·      Before providing a preventive service that exceeds frequency limitations

After having a patient sign the ABN for services that are considered non-covered, the claim requires a modifier to indicate that the ABN is on file and the patient can be billed for the financial responsibility. These modifiers include:

·      GA – Wavier of liability statement issued as required by payer policy, individual case

·      GX – Notice of liability issued, voluntary under payer policy

·      GY – Notice of liability not issued, not required under payer policy

·      GZ – Expect item of service denied as not reasonable and necessary

·      GK – Reasonable and necessary item/service associated with GA or GZ modifier

·      GL – Medically unnecessary upgrade provided instead of non-upgraded item, no charge, no ABN

It is not necessary to have the patient sign an ABN when you provide a non-covered service under Medicare Part B. An example of this would be refraction. A refraction is not a covered service by Medicare so an ABN would not be appropriate in this situation.

Below is a link to the Medicare article explaining the use of an ABN as well as a link to the ABN form for Medicare Part B Claims.

Click here to access the article about Medicare Advance Written Notices of Non-coverage

Advanced Beneficiary Notifications apply to Medicare Part B only. To determine what services are covered and what services are not covered when billing a Medicare Advantage Plan and/or a Commercial insurance plan, you will need to check your contract language and/or check for a Medical/Reimbursement policy specific to that plan. Most Medicare Advantage plans and Commercial insurance plans do not recognize Medicare ABN’s.