The Advance Beneficiary Notice of Noncoverage (ABN), form CMS-R-131, is how a practice or lab tells an Original Medicare patient, before the service, that Medicare will probably not pay. A valid ABN lets you bill the patient if Medicare denies. Without one, the cost usually stays with the provider. This article covers when an ABN is required, when it is only voluntary, how to fill it out, and which claim modifiers go with it.
What the ABN does
When Medicare denies a service as not reasonable and necessary, the patient is protected from the bill unless they were told in advance and agreed to pay. The ABN is that advance notice. It names the service, gives the reason you expect Medicare to deny it and an estimated cost, and lets the patient choose what to do.
The ABN is only for patients in Original Medicare (fee-for-service). CMS's manual states it is not used for services under Medicare Advantage. Medicare Advantage plans have their own process for coverage decisions before the service.
When an ABN is required
Give an ABN when the service is normally covered by Medicare, but you expect it to be denied for this patient. Typical cases:
- The diagnosis doesn't support medical necessity under a national coverage determination (NCD) or a local coverage determination (LCD). For example, a lipid panel ordered with a diagnosis that is not on the NCD's covered list.
- The service exceeds a frequency limit, such as a screening test done sooner than Medicare allows.
- The service is more than Medicare considers necessary for the patient's condition.
You can check whether a diagnosis is on the covered list for a test or procedure with our NCD/LCD coverage checker.
When an ABN is voluntary
An ABN is not required for services Medicare never covers, because the patient is responsible for them anyway. Examples are services excluded by law, such as routine physicals, and the diagnoses a lab NCD lists as never covered. CMS still encourages a voluntary ABN as a courtesy, so the patient knows they will owe the bill. In that case the patient doesn't need to choose an option or sign.
The modifiers
Claims for services where an ABN applies carry one of these HCPCS modifiers:
- GA
- Waiver of liability statement issued as required by payer policy, individual case. A required ABN is on file.
- GZ
- Item or service expected to be denied as not reasonable and necessary. You expected a denial but have no ABN, so the patient can't be billed.
- GX
- Notice of liability issued, voluntary under payer policy. A voluntary ABN was given for a non-covered service.
- GY
- Item or service statutorily excluded, does not meet the definition of any Medicare benefit.
Filling out the ABN
- Use the current form. Download it from the CMS ABN page; CMS re-approves it every 3 years, and an outdated version is not valid.
- Be specific. Name each service and give a genuine reason Medicare may not pay for this patient, such as "Medicare does not pay for this test for your condition." A generic reason is not acceptable.
- Give a cost estimate. CMS requires a good-faith estimate for each item.
- Let the patient choose. Option 1: get the service and bill Medicare, with the right to appeal. Option 2: get the service and pay without billing Medicare. Option 3: decline the service.
- Deliver it in time. The patient must have time to consider the options before the service, not after it has started.
- Keep a copy. Give the patient a copy and keep the signed original for 5 years from the date of service, unless state rules require longer.
Never give an ABN to a patient in a medical emergency, and don't hand one to every patient "just in case". CMS treats routine, blanket notices as invalid.
Common reasons an ABN is invalid
- It was signed after the service, or the patient had no real chance to decide.
- It lists no specific service or reason, or uses the same reason for every patient.
- The cost estimate is missing.
- An old version of the form was used.
- It was given to a Medicare Advantage patient, where it does not apply.
If the patient refuses to sign or choose an option, note that on the form, give them a copy and keep the original. CMS says you should then consider not furnishing the service, unless that would put the patient's health or safety at risk.
Sources: CMS: Advance Beneficiary Notice of Noncoverage (ABN), ABN form instructions, Medicare Claims Processing Manual, Chapter 30, sections 40 and 50.
If ABN-related denials are adding up in your practice, we can help review your front-desk process and claims.