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What is advance beneficiary notice in medical billing?

What is advance beneficiary notice in medical billing

An advance beneficiary notice is a written notice (standard government form CMS-R-131) from Medicare, given to patient before they receive certain equipment or services, notifying patient that:

  • Medicare may not provide reimbursement for that specific procedure or treatment
  • Patient will personally responsible for complete payment if Medicare decline payment

An ABN provide an opportunity to patient either accept or deny the services or items and protects them from surprising financial liability in cases where Medicare is not going to reimburse for that service or equipment. An ABN also offers patient the right to appeal Medicare’s decision.

An Advance Beneficiary Notice (ABN), also recognized as a waiver of liability, this is a notice a provider should give patient before patient receive a service or treatment if, based on Medicare coverage rules, provider has a reason to trust Medicare will deny for the service. Patient may receive an ABN if they have Original Medicare, but not if they have a Medicare Advantage Plan. An ABN look differs provider to provider, it totally depends on the type of provider who gives it to patient.

As discussed, the ABN allows patient to choose whether to accept the care and to choose financial responsibility for the service (out-of-pocket payment) if Medicare do not reimburse the payment. An advance beneficiary notice must document the reason why the provider believes Medicare will not reimburse the payment.

As an example, an ABN may say, “Medicare only pays once in every three years for this test.” Providers are not required to give patient an ABN for services or treatments that are never covered by Medicare, e.g. hearing aids. Note that you are not permitted to give an ABN every time, or to have a blanket ABN policy.

Advance beneficiary notice for Special features of DME

Medicare usually only covers the most basic level of durable medical equipment (DME) to meet patient’s health needs. If patient require additional features or upgrades, patient need pay for them from their pocket. As an example, Medicare will cover a power wheelchair that patient need for home use, but provider request a special backrest or tilt function that is not medically necessary, in this case patient may need to pay for those features from out of pocket.

In some cases, Medicare may pay for special features or upgrades whenever you include them in patients DME order or prescription. In such cases, you should explain this to your patient about why their health condition justifies this additional feature. As an example, if you state that you patient does not have the strength or balance to lift a standard walker without wheels, Medicare need to pay for a model with wheels.

If your DME supplier assume that Medicare might not pay for this additional feature or upgrades, then the DME supplier need to sign a waiver form from patient called an Advance Beneficiary Notice (ABN) before patient get the equipment. ON the ABN, patient must check the box that explains that why patient want the upgrades and agree to pay their full payment if Medicare decline coverage for them. Even if Medicare denies the special feature or upgrade, it should still pay the amount it needs to pay for the basic model of the equipment. Patient will receive a bill for the remaining cost.

If Medicare denied to cover special feature or upgrade, and the DME supplier failed to provide patient with an ABN, then in this case patient need not to owe the DME supplier for the added features.

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