Advance Beneficiary Notice

An ABN in medical billing lets patients know whether or not the payer covers a service. Understanding the advance beneficiary notice form avoids denied claims and maintains Medicare compliance.

Millions of patients, enrolling in the Medicare program, seek services from providers around the US. But not all services are reasonable and necessary for patients, which is why the medicare program often rejects those services for reimbursement. That’s when providers are required to issue an advance beneficiary notice (ABN) to the patient.

What is ABN in Medical Billing?

An Advance Beneficiary Notice, sometimes called an Advance Beneficiary Notice of Noncoverage (ABN), is issued by medical providers to beneficiaries of Medicare. By transferring this form to Medicare beneficiaries, providers can ensure that Medicare will not pay for the service or item. The CMS issued this standardized form (CMS-R-131). The advance beneficiary notice medicare notifies patients in advance that:

• The Medicare program may deny the claim.
• The patient may be personally responsible for the service payment.
• Also, a patient has the option to accept or refuse the service.

ABNs help providers prevent revenue losses by transferring the financial liability to patients if Medicare denies a bill.

Why is an ABN in Medical Billing Important?

An advance beneficiary notice form is important for both patients and providers in terms of financial loss, compliance, and miscommunication. Let’s elaborate on how ABN is important for both entities.

Medicare Compliance

Advance beneficiary notice Medicare assists providers in complying with CMS guidelines. When Medicare is more likely to deny the payment for the service, the provider issues this form in advance to the patient, so they can be informed that they may have to pay out of pocket. This is a legal requirement under Medicare rules, which protects the providers from future audits and potential penalties.

Provider Protection

Providers protect their finances when patients sign the advance beneficiary notice of noncoverage. It means whenever Medicare denies the provider’s claims, the financial liability moves to the patient, so the providers are not facing any health care reimbursement problem.

Patient Clarity

The ABN in medical billing delivers transparency to the patient in advance by helping them understand which services may not be covered by Medicare and why. This prevents the patient from surprise billing and allows them to make informed decisions regarding the service rendering.

When is an Advance Beneficiary Notice of Non-Coverage Required?

Issue an advance beneficiary notice of non-coverage to the patient when you suspect Medicare may not cover the service due to:

• Service is not medically necessary, such as routine foot care, lab tests, etc.
• Service frequency limit exceeds allowable screening tests.
• The service is not covered under a Medicare plan, such as massage therapy, custodial care, etc.
• Experimental or investigational procedures.
• The patient required cosmetic services like skin tag removal or Botox for wrinkles.

In short, an ABN should be given before the service or item is delivered to the patient, so there is no misguidance about payment, and providers could maintain their healthcare revenue cycle.

Elements for filling out an ABN Form correctly

The ABN form in medical billing must be filled out accurately and should be presented right before the service is rendered. Here are the core elements to include in ABN:

A) Notifier (provider): Your name, address, Telephone no.

B) Patient’s name.

C) Internal ID (Optional)

D) The non-covered service (e.g, Anesthesia)

E) Specific service or item and estimated cost.

F) Valid reason why Medicare may deny the claim:

• Medicare does not pay for this service.
• Medicare pays less for this type of test.
• Medicare considers this test investigational or experimental.

G) Estimated Patient cost, which will be within 100$ or 25% of the actual cost.

H) Patient options:

• Bill the Medicare
• Do not bill Medicare
• I don’t need the service

I) A signature box where the beneficiary or their representative will sign and put the date.

Types of Advance Beneficiary Notice Form

The advance beneficiary notice medicare is divided into two subtypes, which include mandatory and voluntary ABNs. Here’s what to expect using both types.

Mandatory ABN

Mandatory ABN in medical billing is used in a situation when providers know Medicare is expected to deny the payment for the item or service under section 1862(a)(1) of the Social Security Act. This form is required when services are:

• Not medically necessary, corresponding to the patient’s health condition.
• When services are rendered for just research purposes.
• Investigational and experimental procedures.
• Provided screenings beyond limits permitted by Medicare.

Voluntary ABN

Voluntary ABN form in medical billing informs the patient about potential costs and empowers them to decide on their care. This form is issued when:

• Items are services that are not covered by Medicare (e.g, hearing aids).
• Issued as a courtesy, especially when dealing with non-Medicare patients, for consistent communication.

Download ABN for Non-Coverage PDF

4 ABN Modifiers and Their Role in Medical Billing

Providers use the ABN modifier on claims to validate and inform Medicare and beneficiaries about noncoverage and patients’ responsibilities for payment. The correct use of ABN ensures the claims are processed correctly. Here’s how to use ABN-related modifiers.

Modifier	Meaning	Role
GA	Mandatory ABN issues	Used when you expect denial due to medical necessity, and the beneficiary is aware of their financial responsibility if denied.
GX	Voluntary ABN issues	Use for services excluded by Medicare, but the provider is still providing them.
GY	Statutorily excluded service	Used when a service is excluded from Medicare and the patient wasn’t notified.
GZ	No ABN issue	Use if you failed to provide an ABN (claim will be denied with no patient liability)

Always remember to avoid using GZ unless it’s necessary. The reason is that it implies non-compliance and results in zero reimbursement.

How to get an ABN Appeal Process Done

Eligibility to Appeal an ABN

A Medical beneficiary can appeal to advance beneficiary notice of noncoverage only if they choose to receive service and select option 1 on the ABN form. This field represents that the provider is allowed to bill the service to Medicare. 

Medicare Summary Notice (MSN) and Denial

Once the bill is denied, Medicare provides the beneficiary with a Medicare Summary Notice (MSN), which states the reason for the denial. 

Timeframe to Appeal the MSN

To appeal the MSN, the beneficiary got 120 days in which they had to respond according to the instructions. 

Enlist Appeal Documents

However, this appeal should list the reasons why they believe Medicare should pay for the service, along with supporting documents such as the Medical record, advance beneficiary notice form, and denial. 

Sending the Appeal

The appeal is sent to the Medicare contractor listed on the MSN. 

Maintain Recordkeeping

Lastly, the patient would have to maintain all related paperwork, including the signed ABN, throughout the appeal process.

Advance Beneficiary Notice Compliance Checklist

An advance beneficiary notice form checklist is mandatory for providers to ensure the form is fulfilling compliance with CMS. Key guidelines to focus on while compiling an ABN are as follows.

• Generate a minimum of two copies of ABN so both the provider and the medicare beneficiary have one as proof.
• Some ABN form customizations are prohibited, such as preprinting information in some boxes to ensure transparency and clarity for the beneficiary.
• Make sure the ABN form does not exceed one page.
• The attachments are allowed when listing more than one service or item, but ensure to refer to those attachments by quoting “See Attached pages”.
• Make sure to use the accurate ABN modifier while submitting a claim.
• This form is applicable only for the Medicare program, so avoid using it for other payers. 

Role of Expert Billing in ABN Form Compliance

Using the advance beneficiary notice of noncoverage is the best way to maintain transparent medical billing and effective patient care. It involves issuing the form to the patient, getting it signed, and then proceeding to the claim. However, with a third-party expert biller, this entire process becomes smooth and flawless. 

At Star Billing Solutions, we take the responsibility of advance beneficiary notice management and medicare compliance. With our expert team, we ensure your every ABN is handled accurately. So, whether you need help with staff training, compliant documentation, or a complete billing report, we are here to take care of your RCM from start to finish.