A Patient's Right to Choose
by Sean Peterson, AOPA Government Relations Department

Should I wear the brown shirt, or the blue one? Should I have the burger or the chicken sandwich?

Everyone likes to be able to choose. And if we couldn’t choose our own health care, we would feel that our rights were being violated. 

Thanks to favorable Supreme Court decisions, patients do have the right to be given sufficient information in order to accept, or reject, health care items or services. This includes items that health care plans do not cover. 

For example, Medicare does not pay for certain items or procedures because it does not consider them medically necessary for a patient’s particular needs. 

However, the patient may still want this service, and the provider may still believe it is needed. That is where the new Advance Beneficiary Notice of Noncoverage (ABN) comes into play. 

Essentially, the ABN protects patients by allowing them to choose whether they will accept a particular item or service. It also affords them the opportunity to discuss less expensive treatment, or alternative, covered services. 

Now Medicare has made revisions to the ABN that benefit patients even further. This month’s “Reimbursement Page” reviews the revised ABN and gives guidance on when to use it. 

What is the ABN?
The ABN is a written notice given to a Medicare beneficiary by a physician or supplier. This notice is given to the patient before providing a service or item that Medicare does not typically consider reasonable and medically necessary for the particular needs of the patient. It is a formal notification that Medicare will most likely deny payment for lack of medical necessity.

It also moves liability from the provider to the patient. While, under Medicare, liability for noncovered services normally rests with the beneficiary, beneficiaries are relieved from financial liability when they did not know that a service or item would not be covered. 

The ABN form was created to ensure that the beneficiaries have been made aware of their potential responsibility. Consequently, beneficiaries must be given an ABN prior to each service that might be denied.

All Medicare providers, whether participating or non-participating, are required to give ABNs to patients when they believe certain items will be denied as not medically necessary. 

The ABN form protects the beneficiary. It ensures the patient has been informed of the expected denial, is afforded the opportunity to discuss the reason for this potential denial with their health care provider, and is made aware that the option to accept liability is voluntary. 

The revised ABN
Suggestions have been made over the past few years regarding how to improve the ABN. CMS has taken these into consideration, along with consumer testing and feedback from the public, and has revised the entire form. 

Beginning with the title, it is apparent that the new form was changed to make it as clear and understandable as possible to the patient. The Advance Beneficiary Notice now has a new name: Advance Beneficiary Notice of Noncoverage. (CMS will continue to refer to this revised form by the acronym ABN.)

The new ABN form immediately makes the beneficiary aware which item or service may not be covered by Medicare. It clearly states that the item may not be covered even though the health care provider and patient may feel it is necessary. 

The new form gives beneficiaries much more information on their options, should they choose to appeal Medicare’s decision to not pay. The form refers to the appeals process and lists an 800 number for additional questions regarding the notice or Medicare billing. 

Also, the form now offers a third option. Instead of the beneficiary only being able to select “Yes” or “No” for a particular item or service, the beneficiary can opt to receive the service, but not have a claim submitted to Medicare. 

Finally, there is now an area where the Medicare provider can include additional information for the benefit of the patient. 

With all the beneficiary-friendly language in the new ABN form, it is obvious CMS wants it to be used. 

But Medicare is very clear that using ABNs consistently—i.e., habitually shifting financial liability to the beneficiary­—is not acceptable. The ABN must clearly outline the reason why the supplier believes Medicare will deem the service not medically necessary. 

Common questions
When is it appropriate to use an ABN? When an item or service is a Medicare benefit, but is not covered because it is not medically reasonable or necessary, the patient’s liability for payment is limited. The beneficiary is not expected to know when Medicare may or may not deny coverage. 

Because of this, any time you know a service or item will be denied, you are required to notify the patient through the ABN. 

Without a signed ABN on file, services denied as not medically necessary cannot be billed to the patient. Liability will remain with you. 

When should I not use an ABN? Medicare providers can always collect their usual and customary charge from patients for services or items that are denied because the item is not a Medicare benefit. Because this would be a general Medicare program exclusion, it would not require a signed ABN. 

Non-diabetic orthopedic shoes not attached to a brace, for example, never receive Medicare coverage. Therefore, practitioners would not need to obtain an ABN.

Although Medicare doesn’t require it, if you would like to inform your patients of a service or item that is excluded from their Medicare benefits, you can use the “Notice of Exclusions from Medicare Benefits” form: www.cms.hhs.gov/BNI/Downloads/CMS20007English.pdf. 

What if a patient requests a more expensive, upgraded item that is not covered by Medicare? O&P practices commonly obtain ABNs when a Medicare beneficiary agrees to pay for an upgraded item. 

For example, a patient’s condition may warrant a prefabricated orthosis, but he or she feels a custom-fabricated orthosis will be more comfortable. The patient can elect to pay for the difference between the prefabricated device and the custom fabricated device by signing an ABN. (The patient would remain responsible for any co-pay or deductible associated with the prefabricated device.) 

However, if the patient was not informed that there were other, less costly alternatives that would not be denied, the patient could not be held liable for the difference. 

Does it matter if I accept assignment or not? No. Whether or not you accept assignment has no bearing on who is financially liable for claims denied due to lack of medical necessity. Since you have stated that you have a specific reason to believe that Medicare will deny the claim as not medically necessary, the signed ABN allows you to collect from the patient without having to wait for Medicare’s official decision on the claim. 

However, if you accept assignment and Medicare in fact pays for the item, you will then be held to Medicare charge limitations. If you collected up front from the patient, you would be required to refund the beneficiary what Medicare paid, plus any amount the patient paid above and beyond the Medicare allowable. If you did not collect up front, and Medicare pays the claim on an assigned basis, you may only bill the patient for the applicable copay and unmet deductible.

If you do not accept assignment, any Medicare payment will be sent directly to the patient. The patient remains responsible for paying your full usual and customary charge, as is the case with all non-assigned claims. 

What if the patient refuses to sign the ABN? For assigned claims, you must document that the patient refused to sign the form on the ABN itself, along with the signatures of two witnesses. If Medicare determines that you made a sufficient attempt to obtain the patient’s signature on the ABN, the liability for payment will remain with the patient. 

For an unassigned claim, a patient’s signature is always required on the ABN to validate it. Should the patient refuse to sign an ABN on an unassigned claim, the patient cannot be held liable. You are not obligated to provide the service in either of these scenarios. 

How will Medicare know if I have the signed ABN form? Include the GA modifier on the claim form next to the procedure code that describes the item or service in question. This informs Medicare that the ABN is on file.

Although Medicare does not require that an ABN form be submitted with the claim, keep the signed ABN in your records so you can make it available upon request.

Benefits for both
The ABN benefits both the patient and you as the provider. It assures that Medicare beneficiaries are properly informed of services which may be denied due to medical necessity. The ABN also proves that you have followed Medicare guidelines. Furthermore, the notice protects you as not being financially responsible when a beneficiary agrees to accept liability. 

Although the decision to sign an ABN rests with the patient, you as the Medicare provider have the responsibility to stay up-to-date on when it is appropriate sign an ABN. 

AOPA realizes that keeping current with Local Coverage Determinations, Medicare billing manuals, and special bulletins applicable to O&P can be burdensome and downright confusing. “Reimbursement Page” will continue to explain how policy changes and Medicare updates affect you. 

Sean Peterson is reimbursement services coordinator at AOPA. Questions? Please contact him at (571) 431-0859 or speterson@AOPAnet.org.