Sharon Evans

T.E.A.M Associates

August 2011

ADVANCED BENEFICIARY NOTIFICATION (ABN)

TRAINING

Note: This document was created as a training tool based on 2011 ABN rulings. Please check the current year requirements to ensure your staff is provided the most updated tools to the ABN compliance standards in combination to your company policies

Introduction of Using ABNs

Advanced Beneficiary Notices (ABNs)-Is a written notice for a provider/supplier to give to a Medicare beneficiary before items/services are rendered and when the provider/supplier believes Medicare probably or certainly will not pay for some or all of the items or services.

- ABNs allow beneficiaries to make an informed decision to receive items for which they may have to pay out of pocket or through other insurance coverage.

- The ABN serves as proof the beneficiary had knowledge prior to receiving the service that Medicare might not pay.

- It allows the beneficiary to better participate in his/her own health care treatment decisions.

- ABNs are documents that can benefit your company if used correctly.

The ABN was previously referred to as a Waiver of Liability.

Terminology

Medical Necessity - Is defined as services that are reasonable and necessaryfor the diagnosis/treatment of an illness/injury or to improve the function of a malformed body and are not excluded under another provision of the Medicare program.

Limited Coverage - Coverage of certain procedures is limited by the diagnosis. If the diagnosis listed on the claim is not the same as one of those listed as covered for the procedure, the procedure is denied.

Mandatory Use - When Medicare is expected to deny payment for the item or service because it is not reasonable and necessary under Medicare program standards.

Voluntary Use - Care that is statutorily excluded, (personal comfort items, cosmetic surgery, immunizations, etc.) The ABN can be issued voluntarily as a form to notify the beneficiary of items not covered.

“Extended Course of Treatment” – Identifies all items and duration of the period of treatment which the health care providers supplier believes Medicare will not pay.

Terminology

The Notice of Exclusions from Medicare Benefits (NEMB) - Is a form that is used when a service or supply is statutorily excluded or not considered a Medicare benefit.

The use of the NEMB form is optional. Your company may use their own process for communicating this information to beneficiaries or use the current ABN form.

A claim will still need to be filed at the beneficiary's request.

The GY modifier will be used and the beneficiary will be liable for all charges related to non-covered items or services.

Terminology

Medicare Replacement Plan - Medicare is a federally administered program, with most of its beneficiaries receiving benefits directly from the federal government. These programs are known as "Medicare+Choice" or "Part C" plans health plans.

Medicare Advantage Plans - Are required to offer coverage that meets or exceeds the standards set by the original Medicare program, but they do not have to cover every benefit in the same way.

Modifiers

GA- Waiver of Liability Statement Issues as Required

GX- Notice of Liability Issued voluntary

GY- Notice of Liability Not Issue, Not Required

• GK- Notice of Actual Item Orders When an Upgraded Item is Provided

• GZ- Item or Service Expected to be Denied as Not Reasonable and necessary or services

Terminology

Refund Requirements (RR) - Is also a financial liability provision of the Medicare law provided under the Social Security Act for all assigned and unassigned claims for medical equipment and supplies.

The significant difference between the RR and LOL is that under RR, the beneficiary may not be held liable for payment unless they actually sign the ABN.

Limitation on Liability (LOL) - Is a financial liability provision of the Medicare law that is provided under the Social Security Act for all assigned claims for Part B Medicare services.

LOL provisions require that the beneficiary be notified if Medicare will likely deny the claim for services as un-reasonable and/or unnecessary ; the provision, however, does not require a beneficiary signature.

If notice is not given, providers may not shift financial liability. The requirements for LOL may be met through the use of the ABN.

Acceptable ABNs

There are two uses for the ABN: Limit Liability The use of the ABN is to Limit the Liability protecting your

company, while informing the beneficiary when there is a probable indication that an item or service will be non-covered.

The ABN will allow your company to collect money from the beneficiary on services that were listed on the ABN that may be denied.

Mandatory ABNs are used before providing items and/or services that are expected to be denied by Medicare because it is not reasonable and necessary under Medicare provisions.

Common reasons: Experimental and investigational Not indicated for diagnosis and/or treatment in this case Is not considered safe and effective Exceeds the number of services that Medicare allows in a time

period

When an ABN is Not Needed

ABNs are also not required when Medicare is expected to deny payment for an item or service which may be a Medicare benefit but for which the coverage requirements are not met. (example: location of service)

Do not confuse coverage requirement with coverage criteria; anytime a denial is expected due to a lack of medical necessity, an ABN is needed.

Since the new ABN form may be used to voluntarily notify beneficiaries of non-coverage it is good business practice to use them to notify beneficiaries of non-coverage for any reason.

ABNs, however, are not required in instances where Medicare is expected to pay for the item or service.

When an ABN Not Needed

Voluntary ABNs are not needed for statutory excluded items and services such as personal comfort items or cosmetic surgeries.

Previously, the Notice of Exclusion from Medicare Benefits (NEMB) was used for providing voluntary notification for those types of services.

The new version of the ABN can now be used for this purpose and eliminates the widespread need for using the NEMB.

Acceptable ABNs

ABNs are designed for Medicare beneficiaries, dually-eligible Medicare and Medicaid, or for coverage plans with Medicare as the secondary plan only.

They are not to be used for Medicare advantage beneficiaries or non-enrollees. These plans may have their own form of communication. Please consult with the plan requirements.

The ABN should be given anytime your company believes that an item or service may be denied or not covered.

They cannot be routinely given to every beneficiary.

A single ABN covering an “extended course of treatment” is acceptable if all items/services that are expected to be denied are identified with the duration of need.

There is a one year limit for an extended ABN.

Acceptable ABN’s

To be acceptable, an ABN must be on the approved form CMS-R-131. The ABN must also meet the following criteria:

Clearly identifies the item or service Contains the statement “the supplier believes Medicare is likely

to deny the claim” Gives the reason why Medicare will likely deny the claim Signed and dated by the beneficiary Record the estimated cost to ensure the beneficiary has all

available information to make an informed decision before services are dispensed- In general, we would expect the estimate to be within in $100 or 25% of actual cost, which ever is greater. Identification of these costs can be “between $100-$300” or “No more than $500”.

Valid Delivery of an ABN

Delivery of an ABN occurs when the beneficiary or authorized representative both received the notice and can comprehend its contents.

Staff must verbally review the form with the beneficiary or authorized representative and answer any questions that are raised during the review.

Beneficiary must be able to completely understand the document. All of the beneficiary's questions must be sufficiently answered by your company.

Delivery of the ABN must occur prior to the services actually being rendered. ABNs should be delivered to the beneficiary or an authorized representative by the acceptable media.

The beneficiary must be notified far enough in advance of receiving services so they can make a rational, informed decision without undue pressure.

Valid Delivery of an ABN

Acceptable forms of notice, are by phone, mail, secure fax machine, or internet email. Telephone notice is not sufficient unless the content of the

conversation can be verified and the beneficiary doesn't contest it.

It must be followed immediately with a written notice and a signature is obtained after phone or in person contact. In that instance the time of the telephone notice would be accepted as the time of the ABN delivery. The original ABN should be kept on file with a copy going to

the beneficiary. Once signed by the beneficiary, it cannot be modified or

revised. If there are changes a new form must be obtained.

Upgrades to Services/Products or Quantities Above Allowed Standards

ABNs are also used when the beneficiary wishes to obtain upgraded equipment or supplies. In this instance the ABN is used when the beneficiary has a

prescription for an item or service and they would like a more expensive model, a model that contains more components or features, or a quantity of supplies greater than what their physician ordered.

When an ABN is used for upgrade purposes, the difference in price between the ordered item and the upgraded item can be collected directly from the beneficiary.

The upgraded code must be in the same class as the ordered item.

A – Notifying Company

B - Patient Name

C - Account Number

D1, D3 - Identify Items/Service D2-Item Name/Code/Qty Supplies/Code/Qty Dispensing Schedule and Quantity 2 per

pair per month for 1 year

E - Clear and Precise Reason (ensure the explanation meets standard)

F - Estimated Cost of Each item (Example)

Billed Rate: $850.00

Estimated Allowance: $550.00

G - Patient must select choice (can not be completed by supplier)

H - Notification expressed by the items in (D), are covered under this document for a 1 year period.

J - Dated the day of service or prior to services rendered.

*More descriptive field and requirements can be found on CMS-website.

Sample

Filling Out an ABN

There are 10 blanks for completion on this version of the ABN, labeled from (A) through (J). The labels may be removed before use and this is recommended.

(A) The header of the ABN should be customized with your company's name, address, and phone number. In addition, your company's logo may be added to the header area. (it is recommended the logos are black and white, they must be legible.

Certain portions of the ABN must be completed for the ABN to be a valid document. (B) The beneficiary’s name which is labeled as identifier for the patient

receiving the services/products. (C) Identification Number should be filled in at the top of the form.

The identifier used should be an identification number for the beneficiary that helps to link the notice with a related claim when applicable. This field is optional. The beneficiary's Medicare number or HICN is no longer used.

Filling Out an ABN

(D) The first portion that must be filled out for validity in the ABN notification includes the each items/services . Notice that under the second section with the indicator of (D)

there is no title. This may be filled in by your company and can vary with clear wording. Some common titles are: item(s), service(s), test(s), procedure(s), equipment and/or supplies.

The equipment or supplies to be provided must be spelled out sufficiently so that the beneficiary may understand what supplies are being furnished. The sole use of HCPCS codes is not an acceptable practice.

(E) The reason for denial. The reason for Medicare denial must be specific and cannot be a

generic statement such as "We never know if Medicare will pay for this service or not covered.”

Filling Out an ABN

(E) (continued…) The following statements may be used as reasons why Medicare is likely to deny payment: Medicare does not usually pay for this service or supply more often

than every 6 months.

Medicare does not pay for services or supplies which it considers to be experimental or for research use.

Medicare does not pay for this item or service for your condition.

(F) The Estimated Cost - We will populate our billed rate and Medicare’s estimated allowance. Your company must add in the estimated cost of the equipment in

the space provided on the ABN.

Filling Out an ABN

The ABN must be filled out in entirety prior to having the beneficiary sign the document.

Suppliers are prohibited from obtaining beneficiary signatures on blank ABNs and then completing the ABN at a later time.

(G) The beneficiary will need to personally select an option listed under this section. (1) They can either choose that they want to receive the items or

services and have Medicare billed. (2) They can choose to receive the items or services and request

that Medicare not be billed. (3) They can select that they have decided not to receive the

items or services.

Filling Out an ABN

The Patient will need to check an option and then sign and date the ABN.

If no option is selected the ABN is deemed invalid.

The beneficiary may sign the form or if they are unable to sign the form, it can be signed by an “authorized representative” (see CMS standards)

Directly under the options section is a spot for additional information. (H) This space may be used for additional clarification that will be of use to beneficiaries.

Collection of Funds

A beneficiary’s agreement to be responsible for payment on an ABN means that the beneficiary agrees to pay for expenses out-of-pocket or through any insurance other than Medicare.

The provider may bill and collect funds for non-covered items/services immediately after an ABN is signed.

If Medicare ultimately denies payment, the provider retains the funds collected.

However, if Medicare pays all or part of the claim for items/services previously paid by the beneficiary or if Medicare finds the provider liable, the provider must refund the beneficiary the proper amount in a timely manner.

Beneficiary Refusal to Sign ABN

If a beneficiary refuses to sign an ABN, items/service(s) may still be provided and paid by the beneficiary on assigned claims. This is a business decision which your company must

make and many suppliers will not furnish supplies if a beneficiary refuses to sign the form.

The ABN must be noted with the signature of a witness. The claim would then be submitted with a GA modifier to indicate the beneficiary was notified that Medicare would likely deny the claim. The "Limitation of Liability" applies which requires

notification but no signature. Member will not be liable.

Beneficiary Refusal to Sign ABN

If Medicare denies the claim, the beneficiary can be billed for services.

On non-assigned claims the "refund requirement" applies which requires notice and signature. Therefore, if the beneficiary refuses to sign and the service is provided, the beneficiary may not be billed.

If the beneficiary refuses to sign and declines service, they can choose option 3 on the ABN and services will not be provided.

Your company can choose to refuse service at any time.

Billing Modifiers

GA - Is used when an ABN is properly completed and signed by the beneficiary . This modifer will be used to inform Medicare that an ABN is on file.

Use of the modifier and the accompanying ABN will protect your company from financial liability if the claim is denied and the beneficiary will be responsible for the full charge.

If the GA modifier is not appended to the claim and the claim is denied for medical necessity, your company is liable for the charge and may not bill the beneficiary.

Billing Modifiers

GZ - Is used if your company expects a medical necessity denial but does not have a signed ABN on file.

In most instances, use of this modifier will not protect your company from financial liability and the beneficiary will not be responsible for the charges.

A different modifier is to be used when billing for upgraded equipment.

GA - Is used on the upgraded item placed on the claim first. GK - will be used for the item actually ordered and placed on the claim directly under the upgraded item.

Billing Modifiers

GZ - If no ABN is on file for the upgraded item, the upgraded item is still listed first on the claim. With GK on the item that was actually ordered on the next claim line.

GL - If your company is billing for an upgraded item for which you are choosing to provide for free, you can bill only for the item that was ordered.

GY - Is used to indicate a service that is statutorily excluded or non-covered. The claim doesn't have to be filed to Medicare unless the

beneficiary requests that it be submitted. The ABN or NEMB can be used for these services. The

beneficiary will be financially liable for all charges.

Summary

ABNs can protect your business from financial liability and compliance risk when used correctly.

Other health plans have similar rules and documents. Each plan should be consulted for the appropriate forms and rules.

ABNs also support customer satisfaction as customers are able to make informed decisions regarding their supply and equipment purchases.

I hope this has supported your team with more knowledge necessary for using ABNs correctly, leading to greater beneficiary satisfaction, generating secure and compliant revenue.

Created by: Sharon Evans

T.E.A.M Associates

THANK YOU