Are you confused about what an ABN is and when you should issue it? This guide will discuss everything you need to understand the CMS-R-131 form, from its components to its applications. However, before we go into the details, let’s first understand what exactly it is.
ABN stands for Advance Beneficiary Notice. It is issued by healthcare providers to Medicare beneficiaries to inform them of services that are not covered under their insurance plan. If you want to learn more, continue reading!
Significance of ABN for Healthcare Providers
Let’s review some of its key benefits for healthcare providers:
Financial Protection
A valid and signed Advance Beneficiary Notice of Non-coverage enables the healthcare provider to legally bill the patient directly in case Medicare denies reimbursement for a service. This not only shifts the financial liability to the patient but also safeguards the provider’s revenue cycle.
Minimized Denial Rate
Providers must append the correct modifiers, such as the GA modifier, to highlight to Medicare that an ABN is on file by identifying potential non-covered services. As a result, the entire adjudication process streamlines.
Enhanced Trust and Transparency
When you provide a Medicare ABN form, it establishes trust by informing the patient beforehand of the potential costs of services. This transparency reduces the risk of patient disputes and surprise bills after treatment.
Guarantees Compliance
Do you want to steer clear of audit risks? If yes, maintain a standardized Medicare ABN process to meet the Centers for Medicare and Medicaid Services (CMS)’s requirements for services.
Legal Safeguard
What happens when you properly execute ABN, using the CMS-R-131 form? It serves as an official record that the patient was warned of their financial responsibility before the care procedure was performed.
What Services Require an ABN for Medicare?
According to the CMS, you must comply with the following requirements when it comes to using an ABN in medical billing:
Understand When a Medicare ABN is Mandatory
You must issue it when you believe Medicare will deny payment for a care procedure that they usually cover, but may not reimburse in this scenario. These scenarios include the following:
- The service does not align with the specific diagnosis, injury, or improved function. That is, the performed service is medically unnecessary.
- The treatment is either considered investigational or is used solely for research purposes.
- The patient has already received the maximum number of allowed services for that timeframe, e.g., the allowable number of therapy sessions.
- The service was a basic daily living assistance that did not require professional medical skills.
Some specialty-specific requirements are listed below:
- Outpatient Therapy: When care is no longer medically necessary. Note: Use the KX modifier if the care is necessary but exceeds the standard threshold.
- Hospice: Issue an ABN before caring for a patient who is not really terminally ill.
- Home Health: Issue before caring for a patient who is not homebound or does not need skilled nursing.
- DMEPOS (Medical Equipment): When the supplier is not contracted in a competitive bidding area, lacks a supplier number, or if the patient wants the item before a coverage determination is made.
Know When an ABN is Prohibited
Never issue it when any of the following is true:
- For Medicare Advantage (Part C) or Prescription Drug plans (Part D). The reason? They have their own specific notification processes.
- For items or services that Medicare definitely does not cover. That is, for statutorily excluded procedures, such as cosmetic surgery or hearing aids.
Components of An ABN Form
The following table explains the components of a Medicare ABN form (CMS-R-131):
| Field Locator | Field Name | Description |
|---|---|---|
| A | Notifier Name | Enter the healthcare provider’s name, address, and contact number. |
| B | Patient Name | Write the first and last name of the beneficiary receiving the service. |
| C | Identification Number | Add the internal ID number for the provider’s office to track the form. |
| D | Service/Item | Provide a clear description of the specific procedure, service, or product that Medicare is expected to deny. |
| E | Reason Medicare May Not Pay | Explain why you believe Medicare will not cover the service, e.g., medically unnecessary, exceeds frequency, etc. |
| F | Estimated Cost | Provide a good-faith estimate of the cost for the listed items or services. |
| G | Options | The patient must select one of three checkboxes to indicate whether they want the service and want Medicare to be billed. |
| H | Additional Information | It is an optional space for the provider to add further details or clarification. |
| I | Signature | The patient must sign the form to acknowledge they received the notice. |
| J | Date | The date the patient signed the form. |
ABN vs. ACN: Understanding the Difference
The table below offers an at-a-glance view of the key differences between ABN and ACN:
| ACN (Advance Coverage Notice) | ABN (Advance Beneficiary Notice) | |
|---|---|---|
| Primary Payer | Medicare Advantage/Commercial Payers. | Original Medicare (Part A & B). |
| Standardization | Varies by insurance carrier. | Highly standardized (CMS-R-131 form). |
| Legal Trigger | Policy exclusions or network status. | Medical necessity disputes. |
| Is It Mandatory? | Primarily, yes, to comply with the ‘No Surprises Act’. | Yes, to shift liability to the patient. |
An Advanced Beneficiary Notice is strictly a Medicare form. Contrarily, ACN is a more general term often used by Medicare Advantage plans and other commercial payers, such as UnitedHealthcare or Blue Cross Blue Shield.
When To Use Each?
Issue an ABN when a service is usually covered by Medicare but may be denied in this specific instance because it is not medically necessary or is being provided too frequently.
When the patient is enrolled under a Medicare Advantage or private insurance plan, do not use the standard CMS-R-131 form. Utilize ACN instead to inform members that a specific service may not be covered under their specific policy.
Maximize Reimbursements with MediBillMD
With that said, it is time to conclude this guide. Hopefully, after giving it a read, you will be able to implement a robust ABN workflow to reduce bad debts and write-offs.
Just remember the key pointers we discussed to determine when to issue an Advance Beneficiary Notice of Non-coverage and when it is prohibited.
However, if you still struggle or are tired of revenue leakages, it is time to outsource medical billing services to professionals like MediBillMD.
