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When an anesthesia or pain management service that is usually covered by Medicare or another insurer may not be covered in a given circumstance, practitioners must issue an advance beneficiary notice (ABN) describing the services and informing the patient of their potential financial responsibility if they choose to proceed.  Failure to appropriately issue an ABN can result in financial liability for the anesthesia or pain management provider.

August 20, 2018

Some anesthesia and pain management procedures and services that are usually covered by Medicare or other insurers with whom your group participates may not be paid in certain instances.  Many of these instances involve questions of medical necessity.  For example, an EKG as part of routine perioperative testing without a specific indication, such as palpitations, would generally not be covered.

When you expect a service or procedure that is typically paid for will not be covered by Medicare or a private insurer in a given circumstance, it’s your responsibility to share this information with your patient in writing, upfront, including an estimate of charges, through what is called an advance beneficiary notice (ABN).

The purpose of the ABN is to enable your patient to make an informed decision about whether to proceed with the services that may not be paid, and to understand what their financial responsibility could be if they decide to receive those services.  Not having a signed ABN in these cases means the patient is not responsible for the charges.  It also means that, if the insurer does not cover the care, your practice will be required to absorb the cost.  It’s important to share with your billing partner when you have issued an ABN.

Some of the more common situations in which an ABN is required in anesthesia and pain management are when a procedure or service is not considered reasonable and necessary, such as care that is experimental or investigational; not indicated for the diagnosis or treatment in question; or more than the number of services allowed in a specific period for a given diagnosis.  These situations are more likely to occur in a chronic pain practice. 

Central to this process is knowing whether there are any National Coverage Determinations (NCDs) or Local Coverage Determinations (LCDs) for the service being billed.  In the absence of an NCD, your local Medicare Administrative Contractor (MAC) may have an LCD that provides guidance regarding coverage for the service in your geographic area.  Medicare or other insurance companies may have an LCD in certain jurisdictions for some procedures, such as cataract surgeries, colonoscopies, anesthesia for a pain procedure or anesthesia for a radiological examination such as an MRI. 

Also note:  an ABN is not required before delivering a service that is never covered by Medicare, such as acupuncture.  However, you may issue an ABN voluntarily as a courtesy to your patient to inform them about their financial responsibility and the service’s estimated cost.

Triggering Events

To determine whether an ABN is required, the Centers for Medicare and Medicaid Services advises thinking in terms of three types of events:

  1. Initiations: the beginning of a new patient encounter or treatment. 
  2. Reductions: when the frequency or duration of care decreases.
  3. Terminations: when all or some services are discontinued and the patient wants to continue receiving care that is not considered medically necessary.

Other important things to know about ABNs:

  • If a patient has signed an ABN and paid for the service, and Medicare subsequently pays all or part of the claim, you must refund the patient in a timely manner, which is generally considered within 30 days of receiving the remittance advice from Medicare. 
  • You cannot issue an ABN on a routine basis or when there is no reason to expect that Medicare will not pay for a service.  There must be a reasonable basis for noncoverage.
  • A “blanket” ABN doesn’t satisfy the Medicare requirement. Medicare does not accept an ABN that was pre-signed and on file to be used in case a service or procedure isn’t covered.  The ABN must be signed in relation to the services or procedure the provider reasonably believes may not be covered.
  • You cannot issue an ABN to shift liability to a patient for services denied due to a Medically Unlikely Edit (MUE), shift liability to a patient when Medicare would normally cover a service, or charge a patient for a component of a service that is fully paid by Medicare under a bundled payment.
  • You must issue an ABN when you believe the quantity of a particular service for a certain diagnosis exceeds the allowed number.  If you’re not sure how many times the patient has received a service, check with other providers involved in their care or use the HIPAA Eligibility Transaction System (HETS).
  • You may issue a single ABN for an extended course of treatment.  The ABN is valid for one year.  The ABN must list all services for which you believe Medicare will not pay.
  • If a beneficiary refuses to sign a properly issued ABN, you should consider not furnishing the service unless the consequences (health and safety of the beneficiary or civil liability in case of harm) prevent this option.

We encourage anesthesia and pain management groups to monitor procedures or CPT codes for which you would expect denial and focus on collecting ABNs for these. 

To learn more about ABNs, an ABN interactive tutorial is available here, and an ABN template and form instructions are available here.

With best wishes,

Tony Mira
President and CEO