American College of Physicians: Internal Medicine — Doctors for Adults ®


Think Medicare won't cover it? Use this new form

From the March ACP-ASIM Observer, copyright 2003 by the American College of Physicians-American Society of Internal Medicine.

By Brett Baker and Carol McKenzie

Q: Do I have to use a special form when notifying beneficiaries that Medicare might not pay for a specific service?

A: Yes. As of Jan. 1, you must use standard advance beneficiary notices (ABNs) from the Centers for Medicare and Medicaid Services (CMS) to inform beneficiaries that they are expected to cover the cost of services Medicare declines to pay for.

Previously, physicians could create their own ABN form or use one from their regional carrier, as long as it included certain information. Medicare established the new forms to ensure that beneficiaries make informed decisions about services they might have to pay for out-of-pocket.

When physicians provide a service, test or procedure that they think Medicare won't cover, they must have the beneficiary (or the beneficiary's representative) sign an ABN before services are provided. Medicare typically declines payment for services that it claims physicians provide too frequently or that fail to meet its reasonable and necessary criteria. Medicare may decline to pay for a service even if it is clinically indicated.

If you don't obtain a proper ABN, you cannot bill the beneficiary directly, unless you can show that you did not anticipate Medicare would deny coverage.

The new ABN form requires you to do the following:

  • Identify the test, service or procedure that Medicare is unlikely to pay for.
  • Document the reason Medicare is unlikely to pay (because a service is offered too frequently, for example).
  • Estimate how much the beneficiary will have to pay out-of-pocket if Medicare does not pay.

Generally, it's inappropriate to ask beneficiaries to sign routine ABNs, except in limited circumstances. For example, you may provide a routine ABN specifying why Medicare will not pay if Medicare has a national policy declaring the service is never reasonable and necessary, such as acupuncture. You should never ask beneficiaries to sign a "blank" ABN.

You can access reproducible ABN forms in English and Spanish from the CMS, or from your regional carrier's site. You can copy ABNs onto legal-sized paper to make the type larger and easier to read, but the form cannot exceed one page. You must provide the beneficiary a copy of the ABN when he or she signs the form.

Once you properly complete an ABN and get the beneficiary's signature, add the modifier -GA (waiver of liability statement on file) to each CPT code on the claim form for each service identified on the ABN.

For more information, see the CMS brochure, "What Physicians Need to Know About ABNs," which includes a list of uncovered services.

Q: Should I use a different ABN for lab tests?

A: Yes. The CMS developed a lab test ABN that is similar to the general ABN, except it contains a "Medicare does not pay for experiments or research-use tests" section. You can modify this section by including a current list of experimental or research-use tests relevant to your practice, for instance, or delete it altogether.

This is the only portion of the ABN you can modify or delete. The lab test ABN is available online.

Labs may reproduce the lab test ABN on the back of their lab test requisition forms. They must distinguish the physician ordering the service from the entity that bills for it.

The CMS encourages ordering physicians to get patient signatures on lab test ABNs, even though the lab that performs the tests is ultimately responsible for doing so. If the physician's office draws blood and sends it to an outside lab, the two entities should draw up pre-test agreements that specify costs and who is responsible to acquire signed ABNs.

The CMS provides guidance on the interaction between physicians and labs (click on "Laboratory's Responsibility and Liability").

Q: Do I need a signed ABN when I provide a service that Medicare never covers?

A: You do not need an ABN for statutorily excluded services such as routine physicals, screening tests and personal comfort items. A list of statutorily excluded services is online. You may, however, submit a claim to Medicare for excluded items so that the patient receives a denial and can submit the claim to a secondary payer. To speed the denial process, use the -GY modifier (item or service statutorily excluded). More on the -GY modifier is online.

Brett Baker is a third-party payment specialist and Carol McKenzie is an administrative coordinator in the College's Washington office.


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