An Advance Beneficiary Notice of Noncoverage (ABN) must be provided to Medicare beneficiaries whenever a provider believes that normally covered services may be denied federal coverage. This notice, through the ABN form, gives patients the information they need to make an informed decision about whether to proceed with care, including their potential financial obligation.
In this guide, you’ll learn how the notice of noncoverage protects patients from unexpected healthcare costs and supports organizational revenue cycle integrity. With answers to key questions about this Medicare ABN form and a clearer understanding of what it includes, you can help promote billing transparency, strengthening patient trust and reducing the risk of billing disputes.
Medicare Advance Beneficiary Notices
The Advance Beneficiary Notice form only applies to traditional Medicare and is intended for its fee-for-service beneficiaries. It isn’t used for Medicare Advantage Plans, Medicare Part C, or commercial insurance, though many of those use a notification process that aligns with ABN requirements.
There are instances for Medicare-insured patients where an ABN isn’t necessary. Treatments that are never covered (known as statutorily excluded services) or fail to meet technical benefit requirements don’t necessitate the delivery of advanced notice because the precedent for denial is well established. This means that a cosmetic surgeon wouldn’t need to issue an ABN before an elective facelift, because Medicare never covers cosmetic surgery.
Sometimes, a standard, typically covered service fails to meet specific Medicare criteria. When this happens, a provider must issue a valid ABN before delivering the service. Failure to do so means that the responsibility for the treatment’s cost may belong to the provider.
Provisions Included Within the Advanced Beneficiary Notice of Noncoverage
The Centers for Medicare and Medicaid Services (CMS) provides official ABN forms in PDF format, including:
When filling out these forms, the provider’s responsibility includes detailing:
- A clear description of the service(s) that may not be covered.
- The reason that Medicare is likely to deny payment for the service.
- An estimated out-of-pocket cost, should the patient go forward with the treatment.
The ABN then directs beneficiaries to choose among three options before signing and dating the form.
- Option 1: Receive the service and submit the claim to Medicare, understanding that they’ll be financially responsible if it’s denied.
- Option 2: Receive the service and pay out of pocket without submitting a claim to Medicare.
- Option 3: Refuse the service.
ABN in Medical Billing: FAQ
There are many situations where services that are typically covered by Medicare may be denied. For example, a mammogram is generally reimbursed, but if it’s performed more frequently than Medicare allows, the subsequent screening may be denied.
To help you navigate these scenarios, we’ll answer some common questions about the Advance Beneficiary Notice of Noncoverage from Medicare (or standard government form CMS-R-131).
What is an ABN’s primary purpose?
Informing patients of their potential financial responsibility before receiving healthcare services is the primary purpose of the ABN. Meaning, it’s meant to facilitate billing transparency and avoid unexpected healthcare charges when Medicare may not cover a future service.
Does the ABN medical abbreviation only apply to notices of noncoverage?
Largely, yes. Some clinicians may use ABN as shorthand for abnormal, but in terms of most medical billing or compliance matters (especially those related to CMS), ABN forms refer exclusively to the advanced notice of noncoverage for beneficiaries.
Additional Medicare notices (not to be confused with the ABN) include:
- Home Health Advance Beneficiary Notice (HHABN), which is used when home health services may not be covered by Medicare.
- Home Health Change of Care Notices (HHCCN), notifying Medicare beneficiaries of changes to their home health services or supplies.
- Notice of Medicare Noncoverage (NMNC), which informs beneficiaries that covered services, like home health, are ending (must be given at least two days in advance).
- Skilled Nursing Facility Advance Beneficiary Notice (SNFABN), used by a skilled nursing facility (SNF) to notify patients that their Medicare Part A coverage may not cover their stay or specific services.
- Hospital-Issued Notice of Noncoverage (HINN), used by hospitals when inpatient services may not be covered (or are ending).
When is a Medicare ABN required?
ABNs can be either voluntary or required. A voluntary ABN may be issued for services that are never covered by Medicare (the statutorily excluded services). A required ABN is necessary when a provider believes a service that’s normally covered by Medicare may be denied. A required ABN should be issued before delivering a service that:
- Exceeds the Medicare reimbursement cap.
- Surpasses frequency limits set by CMS.
- Doesn’t qualify as medically necessary or reasonable.
- Doesn’t meet other Medicare criteria (like clinical progression with treatment), risking denied coverage.
It’s also important that providers issue ABNs only when appropriate. CMS prohibits blanket ABN use when there is no reasonable expectation of denial for a typically covered service, or to purposefully shift financial responsibility.
Who issues the ABN? Medicare or the provider?
CMS provides the standardized ABN forms for providers to use. However, it’s up to the service provider to issue those notices (when appropriate) to the beneficiary. Providers who may use an Advance Beneficiary Notice of Noncoverage include:
- Physicians and other practitioners (like nurse practitioners).
- Ambulance companies.
- Medical equipment suppliers.
- Home health agencies.
- Hospice services.
When more than one party is involved in a service (for example, an ordering physician and an equipment supplier), then the issuing entity who expects the Medicare claim to be denied is responsible for issuing the ABN. The completed ABN must then be kept as part of the medical record for five years from the date of service.
How does a provider determine if an ABN is required?
Providers determine whether an ABN is necessary by evaluating the service in relationship to Medicare’s standard coverage. The decision is generally based on the established CMS coverage rules, including medical necessity considerations and frequency limitations.
For services (like the mammogram example) with frequency limitations, the use of routine ABNs is permitted. However, to avoid any regulatory-based risk (like the blanket use of ABNs), providers should consult their billing and compliance teams for any coverage-related questions. The CMS website also offers helpful ABN guidance.
What happens if a beneficiary refuses to sign the ABN form?
In these cases, service providers have several options. They can either cancel the proposed treatment (avoiding the risk of financial liability) or proceed after a second person witnesses the ABN refusal. The latter is often done in cases where the service is deemed necessary for patient wellbeing and/or safety.
No matter which route a provider takes, the ABN should always be annotated to indicate that the patient refused to sign. Be aware that a refused ABN (even if witnessed) doesn’t transfer the responsibility of payment to the patient if the claim is denied. No matter which route the provider chooses, they must always:
- Annotate the ABN to document the beneficiary’s refusal.
- Give a copy of the annotated ABN to the patient.
- Keep the annotated original within the patient’s medical record for five years from the date of service.
Does using a Medicare ABN change the final billing process?
Yes, an ABN can affect who is ultimately responsible for a particular service’s payment. The billing process is guided by the patient’s selection among the three options presented by the ABN. For example, if the patient chooses to pay out-of-pocket (option two), then the claim is never submitted to Medicare.
Medicare also necessitates billing code modifiers in cases where an ABN was involved. These include the following:
- GA modifier: Used when an ABN was issued and signed for a service that’s expected to be denied (making the patient financially liable)
- GX modifier: Indicates that a voluntary ABN was issued (for a statutorily excluded service for example), so the beneficiary is aware of their financial liability
- GY modifier: Used for services that aren’t a Medicare benefit, meaning that the denial will be automatic
- GZ modifier: Indicates that an ABN wasn’t issued for a service that’s likely to be denied by Medicare, making the provider potentially responsible for any costs
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