When Anesthesia Payment Is in Doubt: Options for Non-Medicare Cases

Summary: The rules surrounding the use of ABNs for Medicare beneficiaries are robust and readily available. When non-Medicare patients present with non-covered services, however, the provider will find that the notification rules are anything but uniform. Care will have to be exercised to follow the diverse provisions of each payer's expectations.

The painters have just arrived. The large two-story estate looms before them like something out of a Faulkner novel. The old girl is still sound structurally, but the cracked and aging exterior belies the need of a real makeover. After two days of stripping the old white paint, applying a deep-penetrating primer and two coats of canary yellow acrylic, the laborers look back with awe and deep satisfaction. It is then that they are told by the homeowners, who have just returned from a weekend getaway, that they have painted the wrong house. Oops.

Of course, the moral of the story is that no matter how skillful one may be in the performance of their duty, it comes to naught if the skill was applied to the wrong circumstance. There may be a lesson in there for anesthesia providers when it comes to the use of Medicare rules in non-Medicare cases.

Over the last few weeks, we have published articles addressing the circumstances that trigger the presentation of an advance beneficiary notice (ABN), as well as the rules governing its usage, in the greater context of Medicare beneficiaries. However, this raises the question: what would the anesthesia provider do in the event the patient does not have Medicare and his or her insurance is likely to deny the requested service? In that event, you would need to know the requirements and/or options available to you. The purpose of this alert is to provide our readers a better understanding of their options and obligations when an ABN-like scenario arises with a non-Medicare patient.

General Principles

When it comes to revenue cycle management, i.e., the process of billing and collecting for services rendered, there is no higher authority than the payer's guidelines—whether they be in a published policy or group contract. Except where federal or state law supersedes, the payer's policies trump all. That includes the CPT coding manual. For example, we have seen payers—such as Medicaid in certain states—that have required the use of billing codes that had long since been deleted from a CPT coding perspective. It doesn't matter; what that particular payer says goes, even where the logic of the requirement is inexplicable.

Having said that, it is true that many payers do fully or partially follow Medicare from a coding and policy perspective. The care team modifiers (eg, AA, QZ, QK, etc.) were largely a creation of Medicare, but many of the larger commercial carriers have adopted them. So, one might think that this same propensity to follow Medicare might apply when it comes to the pre-service protocol for services likely to be denied relative to non-Medicare patients. Just issue these patients the Medicare ABN form, right?

Wrong. Even though Medicaid and commercial payers have, in some respects, followed Medicare's lead when it comes to certain policies, we are unaware of any payer that requires the use of the Medicare ABN form for such circumstances. However, some payers have, in fact, taken a cue from Medicare in this regard. That is, they have published requirements to use a specified patient notification form, with a specified format, etc., for providers to present to patients when the service is likely or certain to be denied. It is not Medicare's ABN, but it is "ABN-like." Below are some examples of these form requirements that we have seen over the years.

Non-Medicare Notices

Certain Anthem Blue Cross carriers require the presentation of a "Member (Patient) Responsibility Agreement," otherwise known as a "Waiver Letter." Here are part of the provisions:

Contracting Anthem Blue Cross health care professionals/facilities ("Providers") are prohibited from charging Anthem Blue Cross Members for any service or supply that is determined by Anthem Blue Cross to be not Medically Necessary, unless the member specifically agrees in advance of the provision of the service or supply to be financially responsible for payment with specific knowledge of Anthem Blue Cross' determination that the service or supply was determined to be not Medically Necessary. This Waiver Letter shall be used by the Provider in such instances and must be separate from any patient payment responsibility information in the hospital admission form. To be effective and valid, this Waiver Letter must be executed prior to the delivery of any service or supply that was determined to be not Medically Necessary.

The provider would need to go on the Anthem's website to obtain the Waiver Letter and any instructions pertaining to its effective execution. This is just one example of what one commercial payer is going to require in this deniable-service scenario. Certain other commercial payers will have their own forms and procedures to use and follow.

When it comes to Medicaid, there may be 50 different sets of guidelines to review, as each Medicaid may vary in these requirements. In New York, for example, if the service is non-covered, the provider may bill the Medicaid patient; however, there are four conditions that must be met:

• 1. The provider must have an established policy for billing all patients for services not covered by a third party. (The charge cannot be billed only to Medicaid patients.)
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• 2. The patient must be advised prior to receiving a non-covered service that Medicaid will not pay for the service.
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• 3. The patient agrees to be personally responsible for the payment.
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• 4. The agreement must be made in writing between the provider and the patient, which details the service and the amount to be paid by the patient.

Unless all the above conditions are met, the provider is disallowed from billing the patient for the noncovered service—even if the provider chooses not to bill Medicaid. Furthermore, the patient's Medicaid Identification Card may not be held by the provider as a guarantee of payment by the patient, nor may any other restrictions be placed upon the patient.

Again, this is just one example from the Medicaid world. You will need to consult your particular state's Medicaid provisions that address these scenarios.

Where the Payer Is Silent

With Medicare, you would use an ABN when denial is a certainty or probability. With payers that have notification requirements for such circumstances, you would follow their instructions and/or use their forms. But what if the payer has no provisions in this regard? In that situation, you can charge the patient for the service, but we strongly recommend that you issue the patient a generic form that advises them of the following:

• * The service they are requesting is likely to be denied by the payer.
• * The patient is expected to pay the provider's full charge.
• * The estimated amount of the charge.
• * A section where the patient can agree to the service and charge, as well as a place for the patient to sign and date.

A copy of the form should be given to the patient and the original should be kept on file by the practice.

The potential denial by payers of healthcare services is something all providers will occasionally encounter. When you know up front of this potentiality, you would do well to protect your financial interests by understanding the rules associated with the ABN or ABN-like instruments. If you would like more information on this topic, please contact your account executive or reach out to us at info@anesthesiallc.com.