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ABNs – Proper Use and Pitfalls to Avoid – Part 1 of 3 | Medtrade
ABNs – Proper Use and Pitfalls to Avoid – Part 1 of 3
AMARILLO, TX – CMS requires Medicare health care providers and suppliers to provide Medicare beneficiaries with an Advance Beneficiary Notice of Noncoverage (ABN), Form CMS-R-131, if the provider thinks Medicare probably (or certainly) will not pay for the items or services because they are not medically necessary. A provider that fails to deliver an ABN when required may not bill the beneficiary for the noncovered items or services.
The requirement to provide an ABN to a Medicare beneficiary is limited to certain Medicare Part B services (outpatient only) and Medicare Part A items and services (limited to hospice services, home health agencies, and Religious Nonmedical Healthcare Institutions only). However, providers are not required to provide Medicare beneficiaries an ABN for items or services that Medicare never covers.
On its face, the ABN is a simple tool to provide Medicare beneficiaries with notice of noncoverage. Below the surface, proper utilization of the ABN form can be difficult, and improper utilization of the ABN form can result in thousands of dollars of nonbillable medical costs. This three part article furnishes providers with guidance to prevent some of the common ABN pitfalls and landmines, and help providers ensure proper liability is established prior to the provision of items or services to Medicare beneficiaries.
Part 1 of our series discusses when an ABN should be issued and when the ABN is “effective.” Part 2 sets out how a provider should properly fill out “D,” “E,” and “F” on the ABN form and the record retention requirements that must be followed. Party 3 discusses when a provider can collect funds from a Medicare beneficiary for an item or service and when those funds must be returned. Part 3 will also discuss the common issues that DME suppliers must address with ABNs.
An ABN should be issued when: 1) the provider believes Medicare may not pay for an item or service; 2) Medicare usually covers the item or service; and 3) Medicare may not consider the item or service reasonable and necessary for this particular patient in this particular circumstance.1
CMS has established additional requirements for durable medical equipment (DME) suppliers. DME suppliers are required to issue an ABN before providing a Medicare beneficiary with items or services if: 1) the provider violated the prohibition against unsolicited telephone contacts; 2) the supplier has not met the supplier number requirements; 3) the supplier is a noncontract supplier providing an item listed in a competitive bidding area; or 4) Medicare requires an advance coverage determination.2 In a competitive bidding area, a DME supplier that is not a contract supplier must issue an ABN to a Medicare beneficiary if the supplier is offering an item or service that is provided under the Medicare Competitive Bidding Program.
CMS prohibits the use of ABNs on a routine basis and requires providers to maintain proper evidence supporting the issuance of each ABN. There are a few exceptions to the routine basis requirement, such as the provision of experimental items or services, services that are always denied for medical necessity, or items and services with frequency limitations for coverage (e.g., contacts and glasses). A provider’s issuance of an ABN can be voluntary or mandatory.
A voluntary ABN may, and should, be used by cautious practitioners in situations in which CMS may deny services, such as for services furnished by a supplier for an immediate member of his or her household, personal comfort items and supportive devices for the feet. CMS makes it mandatory to issue an ABN when the provider expects Medicare to deny payment for an item or service because it is not reasonable and necessary under Medicare Program standards.3 ABNs may not be used under duress (in compelling or coercive circumstances); therefore, CMS recommends that providers not issue an ABN to a Medicare beneficiary with immediate health issues.
A provider’s requirement to issue an ABN is triggered by three different events: initiations, reductions, and terminations. At initiation of treatment, a provider may determine that Medicare may not cover an item or service because the item or service is not reasonable and necessary, and the provider must issue an ABN to the Medicare beneficiary prior to the receipt of noncovered care. A reduction in care (when a component of care decreases) typically occurs because the care is no longer considered medically reasonable and necessary.
In these instances, a provider must always issue an ABN if the Medicare beneficiary wants to continue to receive services that are no longer medically reasonable and necessary. Similarly, a provider must issue an ABN if a Medicare beneficiary wishes to continue to receive care after the provider has terminated services that are no longer medically reasonable and necessary. An ABN must be issued on CMS’s ABN form, Form CMS-R-131, or on a form meeting CMS’s requirements. It is highly recommended that providers utilize CMS’s form when issuing an ABN to a Medicare beneficiary.4
To determine if an ABN is effectively issued, CMS has set forth several standards and requirements. CMS considers an ABN effectively issued when the notice is: 1) issued to and comprehended by the Medicare beneficiary or the beneficiary’s representative; 2) completed on the approved, standardized CMS ABN form with all required blanks completed; 3) provided far enough in advance to the beneficiary to allow it to consider available options; 4) fully explained and all questions about the ABN are answered; and 5) signed and dated by the beneficiary or the beneficiary’s representative after he or she selected one option box on the ABN.5
CMS encourages, but does not require, providers to issue an ABN in person. If an in person issuance is not possible, then CMS permits the issuance of an ABN by email, mail, or secured fax machine, if done in accordance with HIPAA policies and procedures.6 Notice by telephone is not considered sufficient unless the content of the telephone contact can be verified and is not disputed by the beneficiary. Telephone contact must be followed immediately by either a hand-delivered, mailed, emailed, or faxed notice.
Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato PC, a law firm based in Amarillo, Tex. Matthew J. Agnew, JD, is an attorney with the Health Care Group of Brown & Fortunato P.C. They represent pharmacies, HME companies, and other health care providers.
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