When Payment Is in Doubt: New ABN Form for Anesthesia and Pain

​Summary: 

Sometimes, you may not be sure that a service requested by a patient will be deemed medically necessary by the payer. In such circumstances, it may be appropriate to obtain payment directly from the patient, but prior notification is often required.

As a provider of medical services, your first priority is to take care of your patients, but you also want to receive fair payment for that care. There are times, however, when payment may be in doubt due to the nature of the service or procedure you're being asked to render. The fact is, not every treatment episode is going to be considered medically necessary by the patient's insurance plan; and where medical necessity is rejected, so is payment. In those cases where there is serious doubt about whether a service will be reimbursed by insurance, the provider may have the option of seeking payment directly from the patient. This is done by way of an advance beneficiary notice of noncoverage (ABN).

As it pertains to "original Medicare" beneficiaries, you are required to use a particular ABN form, designed by CMS, to notify these patients that Medicare is not likely to provide coverage in a specific case. Those authorized to provide this notification include physicians and "practitioners." These providers may designate their employees or subcontractors to physically provide the ABN to the beneficiary.

An example of when an ABN for Medicare patients might come into play is in connection with an endoscopy case where there may be a question as to whether MAC or general anesthesia will be covered. Usually, Medicare jurisdictions will have a MAC policy that outlines conditions when anesthesia is, or is not, covered for endoscopy. However, some jurisdictions may not have a current policy. Where you believe payment will be denied in such cases, you should consider issuing an ABN to the endoscopy patient. Conversely, where you have no reason to doubt reimbursement, we recommend that you do not engage in the routine issuance of ABNs. On this point, CMS has stated, "Health care providers/suppliers are prohibited from issuing ABNs on a routine basis (i.e., where there is no reasonable basis for Medicare to not cover)."

A New Notice

Every few years, CMS revises its official ABN form, and the agency has just released its latest authorized version. Form CMS-R-131 (which is set to expire June 30, 2023) is now available to replace the current ABN version. However, the agency has announced that due to the ongoing concerns with COVID-19, full transition to the new version will not be made mandatory until January 1, 2021. Again, providers may begin using the new form prior to the mandatory deadline.

Those wishing to access and begin issuing the new ABN form should go to the following link: https://www.cms.gov/Medicare/Medicare-General-Information/BNI/ABN. Once you click on this link, there will be another link at the bottom for the actual form. Once you click on that, you should see a folder with eight different form options. Some are in Word and others are in PDF format. Some are in standard font and others have larger print. Some are in English and others are in Spanish. So, for example, if you want an ABN in English, with normal print and in Word format, you'll simply select that option among the eight available.

The new notice also comes with new instructions for usage—like 7 pages of instructions! Those can be accessed by going to the same link as referenced above and then selecting the "ABN Form Instructions (PDF)" link. Even though detailed instructions are available in this separate document, it may be helpful to summarize, here, some of the key points for our readers.

Highlights for Usage

According to the Medicare Claims Processing Manual (MCPM), Chapter 30, Section 50, the issuance of an ABN is mandated in the following circumstances:

In such a circumstance, the provider must complete the ABN, to include the estimated cost of the proposed service (CMS expects the estimate to be within $100 or 25 percent of the actual costs, whichever is greater), and deliver it to the applicable beneficiary or his/her representative before providing such service.

The ABN must then be reviewed with the beneficiary or his/her representative, and any questions raised during that review must be answered before it is signed by the beneficiary or representative. The ABN must be delivered "far enough in advance that the beneficiary or representative has time to consider the options and make an informed choice." (ABNs are never required in emergency or urgent care situations.) The notifier must retain a copy of the ABN delivered to the beneficiary.

Use of the ABN is designed primarily for situations when payment is in doubt, but the form may also be used when non-payment is certain. That is, the ABN may be issued on a voluntary basis to provide "courtesy notification" of beneficiary financial liability where the service in question is something that Medicare never covers. Examples include routine eye care, routine foot care and dental care. When the ABN is used in this voluntary way, the beneficiary doesn't choose an option box or sign the notice.

Non-Medicare Patients

The criteria for obtaining payment directly from Medicare patients via the use of an ABN are quite detailed. That is, you must jump through several well-defined hoops to ensure you don't run afoul of federal regulations. You have to ensure you're using an authorized version of the form. Then, you have to correctly fill out the form, making sure to effectively deliver and explain the form, etc.; but what if the patient is not a Medicare beneficiary? Is there a similar process for obtaining payment from a non-Medicare patient where the medical necessity of the procedure is in question?

​The short answer is there are two possible solutions as it pertains to non-Medicare beneficiaries:

•   ​Some payers may have their own notification form that they require you to present to the patient prior to the service. They may also require you to submit the claim prior to obtaining the full amount from the patient. So, the provider will need to determine these requirements on a payer-by-payer basis.In most cases, however, commercial payers do not have a set form or process in place for services that are likely to be denied. 

•   In these cases, we recommend using a similar form and process as described by Medicare. That is, where you believe the payer may deny the service due to medical necessity considerations, you will want to provide an "ABN-type" notification form to the patient a reasonable time ahead of the proposed procedure. The customized form should, at a minimum, outline the reason for the notification and the expected out-of-pocket cost. It should also contain a place for the patient to agree/not agree, sign and date.

​Some commercial payers have shown an increasing reluctance to pay for anesthesia services connected with a chronic pain injection. This might be an example of when the use of an ABN-type form might be considered appropriate. Again, you should only issue an ABN when you believe payment for your service is likely to be denied.

If you have questions about the forms or instructions required for potentially non-payable services, please reach out to your account executive or contact us at info@anesthesiallc.com.