What is Medicare ABN (Advance Beneficiary Notice) for Non-Coverage in Medical Billing?

The CMS R-131 form is known as the Advance Beneficiary Notice (ABN), which is used by healthcare providers, physicians, practitioners (including independent labs, home health agencies, hospices), and suppliers to issue Medicare patients when the services or item provided to the patient is most likely to be denied by Medicare.

When should the provider issue an ABN to a Medicare patient?

Healthcare providers need to get signed the CMS-R-131 Advance Benefit Notice (ABN) from your Medicare patients in the following situation.
  • Provider expect Medicare will deny the claim as non-covered or may decline reimbursement for an item or service because it is not appropriate in compliance with the Medicare program standards;
  • Medicare considers the services as custodial care;
  • If the outpatient therapy services exceed the therapy cap amount limitation and do not qualify for an exception;
  • A patient is not terminally ill (only for hospice providers);
  • The requirements for home-health services are not met, and the patient is not confined to the home or does not need intermittent skilled nursing care (for HHA providers);
  • The experimental and investigational services or treatment provided to the patient;
  • Not indicated for diagnosis and treatment in this case;
  • Not considered safe and effective;
  • More than the number of services Medicare allows in a specific period for the corresponding diagnosis.
Additional mandatory requirements apply to DME providers and suppliers. The DME providers must issue the ABN before providing the items or services.

What is Medicare Waiver of Liability (ABN)?

Healthcare providers are required to issue ABN to Medicare patient for services which may not be covered or deemed a medical necessity. The ABN form (Advance Beneficiary Notice) is also known as a waiver of liability document. The provider is required to issue ABN to Medicare patients before giving service based on Medicare coverage regulations, and the provider should have reason to believe that Medicare will not pay for the service and indicate that reason in ABN. You can download Medicare ABN Form here. Note: ABN is applicable only for original Medicare patients. If the patient has Medicare Advantage Plan or private (commercial insurance) health plan, ABN is not applicable. There is a separate Waiver of Liability form for private (commercial insurance) plan.

Why is ABN important to the Patient?

An ABN protects patient rights and informs Medicare that the patient knows about the provision of treatment and procedures performed by the healthcare provider.
  • It also helps the patient to review the detail and reason stated by the provider for which the provider expects the non-coverage from Medicare. The patient may agree or disagree with the item and services listed and protects the patient from potential liability if the payment is refused by Medicare.
  • The patient can file an appeal if Medicare denies the claim that even the patient signed the ABN. The patient can appeal because Medicare has some particular guidelines for ABN on what it should be validated by Medicare. If the rules and regulation laws are not followed, then the patient will not be accountable for the costs of care.

Modifiers required to Medicare for Billing Signed ABN

Below is the list of relevant Medicare Modifiers as per CMS which can be used on the claim with CPT codes when ABN is signed.
  • Modifier GA Waiver of Liability Statement Issued as Required by Payer Policy, Individual Case Use this modifier to report when you issue a mandatory ABN for service as required, and it is on file. You do not need to submit a copy of the ABN, but you must have it available on request.
  • Modifier GX Notice of Liability Issued, Voluntary Under Payer Policy Use this modifier to report when you issue a voluntary ABN for a service Medicare never covers because it is statutorily excluded or is not a Medicare benefit. You may use this modifier in combination with modifier GY
  • Modifier GY Item or Service Statutorily Excluded, Does Not Meet the Definition of Any Medicare Benefit Use this modifier to report that Medicare statutorily excludes the item or service or the item or service does not meet the definition of any Medicare benefit. You may use this modifier in combination with modifier GX. Modifier GZ¬†Item or Service Expected to Be Denied as Not Reasonable and Necessary Use this modifier to report when you expect Medicare to deny payment of the item or service due to a lack of medical necessity and no ABN was issued.
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