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Medicare’s ABN Form: Top 10 Mistakes You’re Making (and How to Fix Them)

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Medicare’s ABN Form: Top 10 Mistakes You’re Making (and How to Fix Them)

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abn form

Using Medicare’s ABN form, Advance Beneficiary Notice might be a routine part of your job, but are you sure you’re doing it correctly and compliantly? Providers and staff who treat Medicare patients must know exactly how and when to issue a CMS ABN form to avoid costly write-offs and penalties. If you’re like most providers and staff, chances are good that you’re making at least one of these common mistakes:

Mistake #1: You Don’t Know When an ABN Form Is Mandatory

When you’re not sure that your patient’s service(s) will be covered by Medicare, or have a reasonable idea of non-coverage, you MUST issue an ABN to the patient. The ABN applies to services that are typically covered by Medicare, but you anticipate may not be covered in a particular situation for a particular reason. You do not need to issue an ABN for statutorily excluded Medicare services.

If your situation fits into one of the following triggering events, issuing the ABN form will be mandatory:

  • Start of treatment: If you have information prior to the start of care that a service that Medicare typically covers potentially may not be covered for a certain reason, you must use the ABN.
  • De-escalation or decrease in services: If the frequency or duration of a service is reduced, and the patient wants to continue receiving that service at a frequency that is not medically necessary or reasonable, you must issue the ABN.
  • End of treatment: If the provider has determined that the service is no longer needed (meaning it is no longer medically necessary) but the patient wants to continue the service, you must issue the ABN.

Mistake #2: You Issue the ABN Form Right Before Surgery

Want to be able to compliantly collect patient payments for potentially non-covered services? Then be sure to issue an ABN form to patients BEFORE rendering the services in question. How far before? It will depend on the particular patient and situation, but in general, far enough in advance so your patient has time to consider his or her options and make an informed choice.

CMS requires that you issue the ABN form before any physical preparation of the patient. This includes:

  • Disrobing
  • Placement in or attachment of diagnostic or treatment equipment

Mistake #3: You Issue the ABN Form to Everyone “Just to Be Safe ”

Some providers do this because it makes them feel “safe,” but CMS prohibits blanket issuance of ABNs. To compliantly issue an ABN, you must have a “genuine doubt regarding the likelihood of Medicare payment,” according to the Medicare Claims Processing Manual. If you use the ABN as a blanket form you may face consequences including Medicare investigations, financial liability for denied claims, and monetary penalties.

Mistake #4: You Get Tongue-Tied Explaining the Patient’s Options

It’s tempting to simply present the form to your patients and ask them to choose an option and sign, but you won’t get off the hook that easily. The purpose of the ABN is to educate patients about potential out-of-pocket costs, so you must sit down with them, explain the form, and be sure that they understand ALL of their options.

To stay in ABN Form compliance, do these five things during your conversation with the patient:

  • Describe the item that may not be covered.
  • Explain the reason why an item may not be covered.
  • Give a reasonable estimate of what the patient may need to pay should the claim be denied.
  • Answer all of the patient’s questions about the form — before she signs it.
  • Allow enough time for the patient to fully consider her options and ask questions before coming to a decision.

Don’t forget to use “beneficiary-friendly language” when issuing the ABN form to patients. Speak in layman’s terms using plain, simple English, keeping clinical terms and medical jargon to a minimum.

Mistake #5: You Give Patients Advice on What Option to Choose

You cannot, under any circumstances, advise a patient which of the three options to choose. All you can do is answer their questions so that they can make a choice. If a patient is unable to physically complete this section, you can enter his selection for him. In this case, you should document on the form that you entered the information for the patient.

Mistake #6: You Don’t Have a Good Reason for Medicare Non-Coverage

On the ABN form, you must identify the reason that each of the services or items in question may not be covered. Some providers simply write that “the item isn’t covered,” but that’s redundant and doesn’t give the patient any real information. You need a specific reason.

ABN form communication: Try to be as succinct as possible: direct, to the point, and not too wordy. For example:

  • Medicare does not cover this test more than once per year.
  • Medicare will not cover add-ons or upgrades.

If the reason is the same for more than one item, you may use that same reason multiple times — you don’t have to come up with a different reason for each item.

Mistake #7: You Use the Wrong Modifiers on the Medicare Claim

You must use certain modifiers when you submit your claim involving an ABN to accurately identify to Medicare the particular situation surrounding the ABN. These modifiers will not affect your reimbursement, but you must still be diligent about using them. Any coding and billing patterns that veer too far from the norm will attract unwanted attention from Medicare auditors.

The most common ABN form modifiers you’ll encounter are:

  • GA: Waiver of liability statement issued as required under payer policy. Use it when: You’ve issued a mandatory ABN and the patient has chosen option 1.
  • GX: Notice of liability issued, voluntary under payer policy. Use it when: You’ve issued an ABN voluntarily, for a statutorily excluded service or one that is not a Medicare benefit.
  • GZ: Item or service expected to be denied as not reasonable or necessary. Use it when: an ABN was required but you didn’t obtain one.
  • GY: Notice of liability not issued, not required under payer policy. Use it when: Use modifier GY to obtain a denial on a statutorily denied service. GY is often used to trigger secondary insurance benefits.

Mistake #8: You Don’t Know How to Document DME

Claims involving durable medical equipment (DME) are subject to a high degree of scrutiny. Medicare does cover standard DME — the most basic model. Medicare may or may not cover DME with add-ons, upgrades, or customization. Because you have reason to expect that these claims will denied, you are required to issue an ABN to the patient.

Some patients may benefit from certain upgrades or customization to their DME based on their diagnoses, and those upgrades MAY be covered by Medicare. The final determination of coverage often comes down to the quality of your documentation.

To document ABN form for DME sufficiently, be sure you include:

  • The diagnosis (one that meets the medical necessity requirements for the device)
  • A description of the device, including the additional feature that the physician believes will medically benefit the patient
  • A treatment plan that thoroughly outlines the necessity of the add-on or upgrade
  • Predicted outcomes based on use of the item
  • Continuous monitoring for those outcomes. Document how the non-standard equipment is helping the patient with activities of daily living or with their prognosis for their condition.
  • Any necessary signatures.

Mistake #9: You’re Not Collecting Out-of-Pocket Patient Payments

According to recent statistics, your likelihood of collecting a patient payment decreases significantly once a patient leaves your office. Many providers find it awkward to directly ask a patient for payment, or even discuss financial matters. But collecting payment before services are provided is the best way to increase your revenue and decrease your collections in AR.

Here are two ABN form situations you’re likely to encounter:

  • If you are in an outpatient setting and have issued an ABN and the patient has chosen either Option 1 or Option 2, do your best to collect their payment at that visit. You may do so unless there is another Medicare policy or state or local law that prohibits you from doing so.
  • If a patient has a secondary insurance plan, you may not want to collect the full payment up front. You may want to wait until the claim is processed by Medicare and then submitted to the secondary payer to see what services will be reimbursed, if any. Many facilities do this to avoid the hassle of issuing a refund to the patient should the claim be accepted.

Mistake #10: You’re Too Slow Issuing Refunds

There will undoubtedly be times that you expect a claim to be denied, and Medicare ends up covering it. If you’ve collected the patient payment in advance, you must issue a refund to the patient (less any co-pays or deductibles).

CMS considers refunds to be “prompt” when they are made within 30 days of the denial, or within 15 days of the appeal, if one was made. Be careful that you don’t confuse this with the 60-day overpayment rule, where you must return an identified overpayment to CMS within 60-days or risk a False Claims Act violation.

Not issuing timely refunds will attract negative attention from CMS — especially if a patient files a complaint. This is grounds for an audit, and you may end up having to pay money back to Medicare and/or civil money penalties. The absolute worst case scenario is that you’re excluded from participating in Medicare.

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