Coding Cues

April 20, 2007

Advance Beneficiary Notices

Keypoints

An Advance Beneficiary Notice is a written notice that informs a Medicare beneficiary, before treatment begins, that Medicare might not cover a particular service or procedure. By signing the notice, the patient acknowledges that he may have to pay for the procedure or service if Medicare doesn't. If you're not getting signed ABNs, your office may have to pick up the tab on all those uncovered or partially covered services.

Once you explain to the patient what services you think Medicare won't pay for and why, the patient can make an informed decision about his options. He can sign the ABN and assume financial responsibility for the procedure in question, cancel the procedure, or reschedule it for a future date when he can afford it or when Medicare may cover it. This could apply if he's coming in for a screening procedure that may violate Medicare's frequency-period rules. Or, he could refuse to sign the ABN and request that you perform the procedure anyway.

Form requirements

A valid ABN must follow Medicare-approved standards and must include the patient's name and Medicare identification number, the name of the items or services in question, and a statement of your specific reason for believing Medicare will deny the claim. Simply writing that Medicare may not cover the service because it's "medically unnecessary" isn't sufficient. The patient must mark one of the two boxes on the mandatory Medicare ABN form indicating that he either wants to receive the items/services or not, and sign and date the form. In addition, you should, but aren't required to, provide the patient with estimated costs of potentially noncovered items/services. You should keep the original of the executed form and give the patient a copy. The general ABN form is available online in English or Spanish at http://www.cms.hhs.gov/BNI/02_ABNGABNL.asp#TopOfPage.

Signature rules

What if the patient refuses to sign? For assigned claims (where you bill and are paid directly by Medicare), a signature isn't required on ABNs to make them effective. But documentation is key in this situation. If the patient refuses to sign the ABN, you should indicate on the form that you addressed the issue with him but that he refused to sign and still requested the procedure. Have a witness among your staff sign and date the refusal, and keep this document in the patient's file. Submit a claim to Medicare as if you had a signed ABN to continue the reimbursement process.

However, you must get the patient's signature for services billed on an unassigned basis (where Medicare pays the patient directly and then he pays you). If the patient refuses to sign, your only options are to not provide the service (which raises other issues), or provide the service at the risk of not being reimbursed by Medicare or the patient.

Modifier use

You should accompany an ABN claim with the appropriate modifier attached to the service's procedure code. This way, Medicare's EOB will properly outline when the patient has to pay.

Use modifier –GA (waiver of liability statement on file) when you've issued an ABN because you expect Medicare to deny the service. This shows you have an ABN on file.

Attach modifier –GY (item or service statutorily excluded or does not meet the definition of any Medicare benefit) when you perform a service or procedure that Medicare doesn't cover. Although you're not required to issue an ABN when you perform one of these procedures or services, when you report –GY in these cases, Medicare will send a denial notice that the patient can use to seek payment from a secondary payer. You can then bill the patient.