Are You Prepared? Discover the Impact of the New Advanced Beneficiary Notice in Effect for Medicare!

A new Advanced Beneficiary Notice (ABN) is now in effect for Medicare. This ABN will help ensure that Medicare beneficiaries are informed of their rights and responsibilities regarding certain services or items requiring prior authorization. The ABN also outlines the potential financial liability associated with such services or items. It is important to review this information carefully before making any decisions about receiving services or items that may be subject to prior authorization.

Let’s Take a Look at The Highlights

As of June 30, 2023, all providers are required to use the new ABN, which expires on January 31, 2026. This article provides an overview of the ABN and when providers should use it.

Notifiers of Medicare fee-for-service (FFS) beneficiaries, including providers, physicians, practitioners, and suppliers, must issue an ABN Form when the Medicare payment is expected to be denied. Essentially, Medicare requires notifiers to alert beneficiaries of the potential for non-coverage and financial responsibility for the items or services prior to rendering them. An ABN is used as proof that the beneficiary was aware of the risk of non-coverage and was willing to accept the financial responsibility if Medicare rejects the claim. Failure to comply with the ABN requirements may result in financial liability or sanctions.

Medicare Processing Manual

Notifiers Should Use an ABN in the Following Scenarios:

  • When items or services are not reasonable or necessary
  • When items or services violate the prohibition on unsolicited telephone contacts
  • When medical equipment and supplies supplier number requirements are not met
  • When medical equipment or supplies are denied in advance
  • When items and services are custodial care
  • When it is a hospice patient who is not terminally ill
  • When home health services requirements are not met
  • When items and services are covered under a personalized prevention plan services that are performed more frequently than indicated
  • When a non-contract supplier provides an item included in the DMEPOS CBP for a CBA
  • When Medicare considers the item or service to be experimental

Considering the various elements, it is essential for notifiers to be cognizant of ABN Triggering Events, which can necessitate the issuance of an ABN to a Medicare beneficiary prior to providing services. The OMB has deemed the CMS-R-131 ABN Form the standard notice to be utilized; neglecting to do so could result in the notice being deemed invalid or the notifier being held accountable for the products or services in question, and the beneficiary can not be charged.

Furthermore, there are a number of other considerations to be kept in mind when completing an ABN. For instance, notifiers should retain a copy of the ABN in the event there is any doubt regarding the beneficiary’s awareness and acceptance of any potential financial obligation. If a valid ABN is accepted by the beneficiary, they may be held accountable for the non-covered items or services. Yet, if a valid ABN is not obtained before providing the items or services, the Medicare beneficiary may not be charged.

Moreover, the notifier is not limited to the Medicare fee schedule and can instead charge their usual and customary fee for the product or service. Should a notifier know or should have known that Medicare would not pay and fails to acquire an ABN or submits an inappropriate ABN, they will be liable for the goods or services. Additionally, notifiers are prohibited from taking money from a beneficiary where a proper ABN has not been obtained and must promptly return any payment given by the beneficiary. Moreover, CMS can also opt to impose sanctions against a notifier.

Why is an Advance Beneficiary Notice Needed?

Known as an “Advance Beneficiary Notice of Non-coverage,” or ABN, it describes a person’s non-coverage in advance. In ABNs, your doctor or health care provider lists the items and services that Medicare may not cover, along with their estimated costs.

In cases where Medicare does not cover services for lack of medical necessity, a properly drafted ABN form transfers financial responsibility to the patient. Before receiving the service, the form informs the patient of the likelihood of non-coverage.

When Should You Provide an ABN?

If you plan to charge your patient for a service that may not be covered by Medicare, then you must issue an ABN. If the service is typically covered by Medicare, but the patient is unlikely to receive it due to a lack of medical necessity, an ABN is necessary. However, services that are never covered by Medicare do not require an ABN. To be sure if an ABN is necessary, the best approach is to simply get one. That way, you’ll have your patient’s written acknowledgment of responsibility when it comes time to submit your billing.

For services such as laboratory tests, Pap smears and pelvic exams, fecal-occult blood tests, flexible sigmoidoscopies, prostate cancer screenings, and tetanus vaccines, obtaining an ABN may be necessary if they are requested more frequently than what is generally covered by Medicare or if the beneficiary is under a certain age.

What is the Process for Obtaining an ABN?

Giving an ABN to a patient is an important part of the informed consent process. In order to be valid, it must be provided in a manner that allows the patient to make an informed decision regarding their treatment – when they are not under duress and not in an emergency situation. A patient signature is not always required for an ABN to be valid, though it is best practice to obtain one.

In the event that a patient is not capable of signing, an authorized representative may do so on their behalf. It is important to establish a protocol for determining who may serve in this capacity and to ensure that ABNs are correctly drafted and given to the patient prior to performing services. While other providers may be responsible for actually delivering the ABN, the ultimate responsibility lies with you, so it is important to coordinate and monitor the process.

What form must Physicians Use to Meet the Requirements of the ABN?

To satisfy Medicare requirements, physicians must complete the ABN form approved by CMS – with printable versions in both English and Spanish available on the CMS website. You’ve got until January 31, 2026 to complete this ABN form!

ABNs and Compliance

When it comes to ABNs and compliance, not only can they have a big financial impact on your practice, but they also provide a key element for fraud and abuse control. If you violate the Medicare regulations by charging for medically unnecessary services, you may be subjected to civil penalties, treble damages and being excluded from the Medicare system. Though an ABN cannot change an already fraudulent claim, it does create proof that the patient was aware that the service might not be medically required, yet still chose to go ahead with it.

Final Thoughts:

Maximizing your revenue could be made easier with the help of ABNs. Now is the ideal time to get familiar with the new regulations and start using them in your practice, as CMS has provided both new rules and approved forms. For more info, check out CMS website!