Understanding how to properly use the Medicare Advance Beneficiary Notice (ABN) is critically important because it has financial, fraud, and abuse consequences. Using it correctly could permit providers to collect monies legally that may otherwise have been left on the table. Misusing it could result in fraud and abuse investigations, refunds, fines, penalties, and administrative sanctions. Providers[i] must know and comply with billing and coding regulations when they bill Medicare or any other payer.
In plain language, an ABN is an Advance Beneficiary Notice of Noncoverage provided to an original Medicare beneficiary. This notice helps patients enrolled in Medicare fee-for-service (Part B) make informed decisions about items and services Medicare usually covers but may not cover in specific situations. For example, when:
- A Medicare item or service that is not reasonable and necessary under Program standards, laws, regulations, policy, and any medical necessity criteria as defined by National and Local Coverage Determinations;
- Care that is not indicated for the diagnosis, treatment of illness, injury, or to improve the functioning of a malformed body member;
- Care that is experimental and investigational or considered research only. [ii]
A provider who fails to comply with the ABN use and instructions risks financial liability and sanctions. Limitation on Liability (LOL) provisions shall apply as required by law, regulations, rulings, and program instructions.
Medicare has multiple ABN forms, but the proper one for outpatient fee service notices is CMS-R-131, with an expiration date of 1-31-2026. The R-131 is inappropriate for Medicare Advantage (Part C) patients. Providers should query their payers to ascertain if a written notice of financial liability is required.
The following questions and answers should assist providers with making compliant decisions about when and how to use the Medicare ABN.
Question 1:
When must therapy providers issue the mandatory ABN for services provided to original (fee for services) Medicare beneficiaries?
Answer 1:
Providers that intend to collect from beneficiaries directly must issue an ABN to them prior to providing therapy or items that will or may be denied as not medically reasonable and necessary, regardless of the amount of incurred expenses. The provider must file a claim affixing the GA modifier to the claim line for services rendered.
Question 2:
If treatment was initiated before providing a valid ABN, are all subsequent treatment costs the financial liability of the provider?
Answer 2:
No, a valid ABN can be issued at any point of care, and it applies to all services from the date of signature on the ABN. All services provided prior to the issuance of the ABN would be the financial responsibility of the provider; ABNs cannot be backdated.
Question 3:
Is the patient or provider financially liable if an incomplete or improper ABN is issued?
Answer 3:
Medicare contractors will investigate allegations of improper or incomplete notices. If the provider is found to have given an improper or incomplete notice, the applicable Medicare contractor will hold the provider liable for the services rendered.
Question 4:
Can a provider bill for services or items covered by a valid ABN at their usual and customary fee, or does the provider have to use the Medicare fee schedule?
Answer 4:
Providers are permitted to charge and collect their usual and customary fees; therefore, funds collected are not limited to Medicare-allowed amounts. A beneficiary’s agreement to be responsible for payment on an ABN means that the beneficiary agrees to pay for expenses out-of-pocket or through any insurance other than Medicare that the beneficiary may have. The provider may bill and collect funds from the beneficiary for non-covered items or services immediately after an ABN is signed unless prohibited from collecting in advance of the Medicare payment determination by other applicable Medicare policy, State or local laws.
Question 5:
What should the provider do if Medicare or the patient’s secondary insurer pays the claim submitted with a GA modifier and the patient self-paid?
Answer 5:
The provider must refund the patient for any payment made if Medicare or a secondary payer pays all or part of a claim submitted with a GA modifier. The refund must be made within thirty days of receipt of the remittance advice or sooner if state law requires.
Question 6:
How long should the ABN document be retained?
Answer 6:
The ABN contains Protected Health Information (PHI) and is part of the patient’s record. It should be retained per state record retention regulations.
Question 7:
How long is the ABN effective when repetitive or continuous non-covered care occurs?
Answer 7:
ABNs for repetitive care are not required to be reissued, providing there are no changes in Medicare coverage guidelines relevant to the ABN. A new ABN should be issued if different services are warranted or the beneficiary’s condition changes. If none of these change, Medicare will not require a new ABN.[iii]
Question 8:
When is an ABN OPTIONal or Voluntary?
Answer 8:
ABNs are not required for care that is either statutorily excluded from coverage under Medicare ( i.e., care that is never covered) or care that fails to meet a technical benefit requirement (i.e., a lack of the Plan of Care certification).
When the ABN is used voluntarily, it serves as a notice of impending financial obligation. The provider should issue a voluntary ABN and complete fields A, B, C, D, E, and F. The patient does not have to complete field G. They should, but are not required to, sign fields I and J.[iv]
Question 9:
What must the provider do if the beneficiary chooses OPTION 1 on the ABN?
Answer 9:
The provider must submit a claim to Medicare for a payment decision. The beneficiary can appeal the decision when OPTION I is selected.
Question 10:
What must the provider do if the beneficiary chooses OPTION 2 on the ABN?
Answer 10:
When the beneficiary wants the item or services described on the ABN and accepts financial responsibility, he or she agrees to make payment now, if required. When the beneficiary chooses OPTION 2, The provider does not file a claim, and there are no appeal rights. Providers do not violate mandatory claims submission rules under Section 1848 of the Social Security Act (the Act) when they do not submit a claim to Medicare at the beneficiary’s written request.
Question 11:
Can providers issue an ABN to a Dually Eligible (QMB) Individual?
Answer 11:
ABNs may be issued to a dually eligible (Medicare/Medicaid) beneficiary, but the provider is prohibited from billing the patient until Medicare and Medicaid adjudicate the claim.
Once the claim is adjudicated by both Medicare and Medicaid, providers may only charge the patient in the following circumstances:
- If the beneficiary has QMB coverage without full Medicaid coverage, the ABN could allow the provider to shift financial liability to the beneficiary per Medicare policy.
- If the beneficiary has full Medicaid coverage and Medicaid denies the claim (or will not pay because the provider does not participate in Medicaid), the ABN could allow the provider to shift financial liability to the beneficiary per Medicare policy, subject to any state laws that limit beneficiary liability.
See MLN FACT SHEET for more information on Dually Eligible Beneficiaries.
Question 12:
What should the provider do if the patient selects OPTION 3?
Answer 12:
Beneficiaries cannot be billed for non-covered services or items and will not accept financial liability. Providers, therefore, do not file a claim, and there are no appeal rights. The provider must determine if withholding the service would cause significant harm or violates a statute. If not, services do not have to be provided.
Question 13:
Can routine ABNs be issued to all Medicare beneficiaries?
Answer 13:
ABNs should not be routinely issued unless the noncoverage is due to the following:
- The use of experimental items or services (at this time Class IV Laser/photobiomodulation)
- Exceed frequency coverage limitations (some interventions are limited per LCD, i.e., Lymphedema Decongestive Treatment)
- Provide medically unnecessary services (injury prevention & wellness treatments)
- Charge a patient for one of a bundled procedure pairs (bill for massage when it is performed on the same visit as manual therapy—CCI edit-no separate payment)
Question 14:
What can a provider do if a patient changes his/her mind about the ABN?
Answer 14:
If a patient changes his/her mind about the OPTION selected after signing the ABN, the provider should present the previously completed ABN to the beneficiary and request that his/she annotate the original ABN with a clear indication of his/her new OPTION selection. The annotated ABN must be signed and dated by the beneficiary.
Question 15:
What can a provider do if a patient wants a service but refuses to choose an OPTION or sign the ABN?
Answer 15:
If a beneficiary refuses to choose an OPTION or refuses to sign the ABN when required, the provider should annotate the original copy of the ABN indicating the refusal to sign or select an OPTION and may list witness(es) to the refusal on the notice although this is not required. If a beneficiary refuses to sign a properly delivered ABN, the provider should consider not furnishing the item/service unless the consequences (health and safety of the patient or civil liability in case of harm) are such that this is not an OPTION.
Question 16:
What is considered a proper delivery of an ABN?
Answer 16:
The ABN should be delivered:
- With all required blanks completed,
- In-person, if possible, by the provider to the beneficiary or his/her representative;
- Far enough in advance for the beneficiary to consider all available OPTIONs;
- With adequate explanations and provide time for the beneficiary to ask questions with timely and accurate responses.
ABNs can be delivered via an electronic screen, but the provider must provide a hard copy if the patient requests one. If the signature is captured or manually penned, the beneficiary should be given a hard copy of the ABN.
Alternative delivery methods can be employed by phone (followed by a hard copy ABN), mail, secure fax, and secure email. These methods must comply with HIPAA, and the beneficiary or his/her representative must acknowledge receipt to validate delivery. Services cannot be delivered until the beneficiary has signed and forwarded the ABN.
Question 17:
Should a physical therapy provider issue an ABN to a Medicare beneficiary when providing a non-covered service such as trigger point dry needling?
Answer 17:
While Medicare does not require providers to issue an ABN for non-covered services, it highly recommends that they do so voluntarily. As discussed in Answer 8, the voluntary ABN serves as a notice of impending financial obligation and better prepares patients to evaluate their financial responsibility.
Patients do not typically make an OPTION selection on a voluntary ABN, but if they insist on a choice and choose OPTION 1, the provider would need to file the claim for the service and affix the GX modifier. However, the GY would be affixed to the claim if the patient has secondary coverage. This modifier indicates that the provider is aware that the services are not covered but is submitting the claim for a demand denial for secondary payer consideration.[v]
Question 18:
What are the modifier options for the ABN?
Answer 18:
| Modifier | When to Use the Modifier |
| GA
Waiver of Liability Statement Issued as Required by Payer Policy |
Report when you issue a mandatory ABN for services as required and keep it on file. You don’t need to submit a copy of the ABN, but you must make it available on request. Use the GA modifier when covered and non-covered services appear on an ABN-related claim. |
| GX
Notice of Liability Issued, Voluntary Under Payer Policy |
Report when you issue a voluntary ABN for a service Medicare will never cover because it’s statutorily excluded or isn’t a Medicare benefit. You may use this modifier combined with the GY modifier. |
| GY
Notice of Liability Not Issued, Not Required Under Payer Policy |
Report Medicare statutorily excludes the item or service, or the item or service doesn’t meet the definition of a Medicare benefit. Use may use this modifier combined with the GX modifier. |
| GZ
Expect Item or Service Denied as Not Reasonable and Necessary |
Report when you expect Medicare to deny payment of the item or service because it’s medically unnecessary and you didn’t issue an ABN. |
Question 19:
Should I file a claim for each repetitive service under a voluntary ABN?
Answer 19:
There is no requirement to file a claim when issuing a voluntary ABN for non-covered services/items; however, if a claim is not filed, there are no appeal rights.
Question 20:
Should I automatically issue an ABN when the patient reaches the KX Threshold or the Manual Medical Review Threshold?
Answer 20:
An ABN should never be issued if the services or items are medically necessary. The patient’s Plan of Care status (goal achievement) and need for skilled intervention should be documented to support the need for skilled services. An ABN can be used if the provider cannot justify medical necessity under Medicare regulations but determines that further treatment could benefit the patient and agrees to pay for the services identified.
The KX modifier indicates medically necessary services over specific thresholds. Using the KX modifier and any ABN modifiers for the same services would be contradictory.[vi]
Submitted by: Mary R. Daulong, PT, CHC, CHP
[i] The term provider will be used to represent therapists rather than the official Medicare definition of provider.
[ii] R10863CP.pdf Medicare Claims Processing Manual Transmittal 10862 Chapter 30 Section 50
[iii] MLN006266 June 2022 Medicare Advanced Written Notices of Non-coverage
[iv] MLN006266 June 2022 Medicare Advanced Written Notices of Non-coverage
[v] Novitas Solutions ABN Modifier Fact Sheet
[vi] Medicare’s Outpatient Therapy Advance Beneficiary Notice of Non-Coverage (ABN) Form CMS R-131, August 2018