July 5, 2011

Beginning on November 1, 2011, all physicians must use a new and minimally revised Advance Beneficiary Notice of Noncoverage (ABN) form. This revision is part of a regular three-year cycle and it contains minor changes only. You should have in place a supply of the new version, dated March 2011, by November 1, however, because you will not be able to collect payment if you continue to use the 2008 version.

The ABN puts a patient on notice that the physician expects Medicare to deny payment for the particular procedure or service proposed on the ground that it is not “reasonable and necessary." It lets the patient know that s/he will be liable for the full charge unless Medicare allows the claim. If the physician does not obtain a valid ABN, the practice will not be able to bill the patient if and when the claim is denied. A physician who can demonstrate that s/he did not know and could not reasonably have been expected to know that Medicare would not make payment, however, will not be held financially liable for failing to give notice.

Examples of services that Medicare may deny include a greater number of trigger point injections than the carrier's Local Coverage Determination (LCD) allows, and monitored anesthesia care (MAC) for certain patients undergoing certain procedures.

The instructions accompanying the ABN form make some basic points that you should remember:

1. The ABN must be reviewed verbally with the patient or his/her representative and any questions raised during that review must be answered before it is signed.
2. The ABN must be delivered far enough in advance that the patient or representative has time to consider the options and make an informed choice.
3. ABNs are never required in emergency or urgent care situations. The ABN may be delivered to the patient by any employee or agent of the practice; this is not like informed consent given for the anesthesia service and the participation of the anesthesiologist, CRNA or AA is not necessary.
4. Once all blanks are completed and the form is signed, a copy is given to the patient or representative.
5. You may customize the form to a rather limited extent. ABNs must be reproduced on a single page, in the same font as the downloadable form.
6. The following may be pre-printed:
• Physician/Practice (“Notifier”) name, address, telephone number;
• The name of the procedure or a menu of procedures for which the practice expects Medicare to deny payment (a time-saver if a procedure requiring an ABN is performed frequently). It is not necessary to use the full formal name of the procedure; “anesthesia for wound repair” would more than suffice.
• The reason that the claim is expected to be denied. The instructions provide verbiage for three commonly used reasons:
• “Medicare does not pay for this test for your condition.”
• “Medicare does not pay for this test as often as this (denied as too frequent).”
• “Medicare does not pay for experimental or research use tests.” These three reasons for expected noncoverage could be pre-printed as long as the applicable one(s) are clearly marked by a check mark or encircling, for example, when a copy of the form is delivered to the patient;
• A cost estimate for the pre-printed procedure(s). The instructions indicate that the estimate should be made “in good faith” and in general would be within $100 or 25% of the actual costs, whichever is greater. The instructions include the following examples:
• For a service that costs $250: 
•  "Any dollar estimate equal to or greater than $150" 
• “Between $150-300” 
• “No more than $500” 
• For a service that costs $500:
• "Any dollar estimate equal to or greater than $375" 
• “Between $400-600” 
• “No more than $700”
7. The options whether to proceed with the procedure or not must be filled in by the patient or representative, who must also sign and date the form.
8. If the patient cannot or will not make a choice, the notice should be annotated, for example: “beneficiary refused to choose an option”.
9. ABNs should be delivered in person and prior to the delivery of medical care which is expected to be noncovered. In circumstances when in-person delivery is not possible, anesthesia practices may deliver an ABN through one of the following means:
• Telephone contact;
• Mail;
• Secure fax machine; or
• E-mail.
10. The ABN may remain valid for as long as a year. In general, the minimum retention period is five years from discharge/completion of delivery of care when there are no other applicable requirements under State law.
11. If Medicare unexpectedly does pay all or part of the claim for items or services previously paid by the patient to the practice, the physician must refund the proper amount to the patient in a timely manner.
12. Refunds are considered prompt when made within 30 days of notice of denial from Medicare or within 15 days after a determination on any appeal.
13. Physicians who knowingly and willfully fail to make a refund where required within these time limits may be subject to civil money penalties and/or exclusion from the Medicare program.

We encounter the following questions on a recurring basis:

• Does the Medicare "limiting charge" still apply or can I bill the patient my unreduced fee?
• You may bill your unreduced fee. The most significant change in the ABN form is that the practice is required to complete the "estimated cost" field, which was previously optional.
• Does the physician have to discuss the ABN and obtain the patient's signature personally?
• No. The ABN is not like informed consent and the entire process of explaining its purpose and having the patient sign the form may be delegated to an employee.
• I never know whether Medicare is going to pay. Should I have all my patients fill out an ABN?
• No. Medicare prohibits this practice and requires you to make a judgment. If you expect Medicare to pay, don’t use the ABN. If, however, you know that the service is simply not covered by Medicare, e.g., anesthesia for a rhytidectomy, you have the option of using the ABN, but it is not required in order for you to be able to collect.
• Do I need to file the ABN with Medicare?
• No. You should give the patient a copy and keep a copy in your files. Remember, the purpose of the form is to document that you gave the patient notice that he or she might be personally responsible for your charges.

For even more detail, you may download the relevant section of the Medicare Claims Processing Manual, Chapter 30 (Financial Liability Protections), Section 50 (Form CMS-R-131 Advance Beneficiary Notice of Noncoverage (ABN)). ABC clients should check with their account managers to make sure that they will be ready to use the new forms, if they are not already using them. We will make sure to append the –GA modifier (“Waiver of liability statement issued as required by payer policy”) to your claims. All readers should begin using up their stock of existing ABN forms and prepare to use the 2011 version. We hope that this Alert has been helpful.

With best wishes,

Tony Mira
President and CEO