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Medicare ABN in a Nut Shell

October 21, 2013

Too many CHCs see too few Medicare patients to become truly expert at all aspects of Medicare’s complex rules and regulations. However, one area about which a CHC should be well informed is the use of the Medicare “waiver” known by the more formal name of the Advanced Beneficiary Notice (ABN).

The ABN is used to notify a patient that they may have financial liability for a service that is about to be rendered or ordered. For instance, a Medicare beneficiary, depending on the result of an ordered lab test will find that the test may or may not be paid for by Medicare depending on whether it is a screening or an analysis of an existing, covered ailment/condition. If the screening is covered (and the frequency or time interval between such testing is within Medicare guidelines) the claims is paid. If, however, either due to frequency or simply lack of coverage, Medicare denies the claim, what do you do?

At this point, most CHCs simply bill the patient for the lab work… remember this is a service (like any CHC based diagnostic test) that is billed to Medicare Part B via the 837-P… it is NOT included in the “encounter rate” payment received from Part A via the 837-I. However, and this is the challenge, all Medicare patients should be signing an ABN if there is any chance or possibility that the service they are receiving MIGHT NOT get paid.  It is essentially a warning. If an ABN is not signed and retained, it is a violation of Medicare statute to bill them for the denied service. Remember it must be signed BEFORE the service is rendered… and yes, this includes venipuncture for a lab test being sent to an outside lab.

So this is where folks ask, but what if the service is not covered… ever. This is hard to contemplate at a CHC since nearly all visits for Medicare beneficiaries result in a core provider or support staff addressing one of at least several chronic problems which almost always results in a “medically necessary” visit. However, it happens. So… even if a service is non-covered it is perfectly legitimate to have the patient sign an ABN. Now for the most interesting part… at least to me. If the patient refuses to sign the ABN, you must document that fact and thereafter you are permitted to balance bill them for any non-covered services. By the way, I am assuming you are reading the explanation of benefits (EOB to most) and it CLEARLY lists the denied service as a patient vs. a provider (the latter meaning CHC) liability. As long as the EOB communicates that the patient is liable AND you have a signed ABN… or documentation of a patient refusal to sign one… go ahead and bill them.

One final note, if the patient has signed an ABN, remember to affix a “-GA” modifier(HCPCS suffix) to the unique CPT code that describes the service for which the ABN was signed.

Below is a quick cheat sheet taken directly from CMS so feel free to use at your leisure.

ABN- Quick Reference Guide

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