What is an ABN in Healthcare?
An ABN in healthcare is an Advanced Beneficiary Notice of Non-Coverage given to a Medicare beneficiary by a healthcare provider when it is possible that Medicare will not cover the cost of a medical service or item. This is usually because the service or item might not be considered medically necessary when Medicare is billed by the healthcare provider.
In such cases, the beneficiary (i.e., patient) is asked to pay for the item or service upfront or through an alternative health insurance policy. If Medicare subsequently agrees to pay for the item or service, the healthcare provider will reimburse the beneficiary (or alternative health insurance policy) minus any deductible or copay. Beneficiaries also have the option of paying upfront without a claim for payment being submitted to Medicare, or declining the service or item.
Why Might Medicare Consider a Service or Item Unnecessary?
Medicare Part A and Part B Fee-For-Service programs generally limit what medical and other health services Medicare will pay for to those listed in §1861 of the Social Security Act. However, there are exceptions when a service or item is considered medically necessary. For example, Medicare will not pay for custodial care in a patient’s home, unless the provision of custodial care reduces the impact of injuries or health conditions, or avoidable emergency room visits.
Similarly, Medicare will not cover the cost of routine eye examinations, but will cover the cost of incidental services if a routine examination identifies an eye disease such as glaucoma. There are also times when Medicare may cover the cost of cosmetic surgery, dental services, prosthetic devices, and foot care depending on the circumstances in which medical services or items are provided. When it is not certain that the cost of a service or item is covered by Medicare, beneficiaries will be asked to sign an ABN form.
What Does an ABN Form Consist Of?
An ABN in healthcare is a single page document sometimes referred to as a “Medicare waiver”. The form identifies the healthcare provider and beneficiary by name and identification number, and explains to the beneficiary that Medicare may not pay for a service or item, in which case the beneficiary is liable. The form includes spaces to list the service or item, the reason why Medicare may not pay, and the estimated cost of the service or item the beneficiary may be liable for.
The next section of the ABN in healthcare gives the beneficiary the options of paying for the service or item and requesting that Medicare is billed, paying for the service or item without Medicare being billed, or declining the service or item. There is a subsequent section in which the healthcare provider or beneficiary can add additional information. The form is then signed and dated by the beneficiary, who should also receive a copy of the ABN form.
The Other Purposes of an ABN in Healthcare
An ABN in healthcare has several purposes. The first is that, by advising beneficiaries of services and items Medicare might not pay for, it make beneficiaries more aware of the conditions to be eligible for tests, treatments, and medical devices. This has the benefit of preventing beneficiaries from turning to healthcare providers for every element of their healthcare and encouraging them to take responsibility for their own wellbeing.
When beneficiaries continue to rely on healthcare providers, an ABN in healthcare ensures the healthcare providers will get paid. In addition, if a claim for payment is submitted to Medicare with an ABN, it demonstrates to Medicare that the healthcare provider is aware of their fraud and abuse compliance responsibilities, and is not routinely billing for medically unnecessary services or submitting claims with fraudulent intent.
