Understanding ABN in Medical Billing

The Centers for Medicare and Medicaid Services (CMS) defines the rules for using Advance Beneficiary Notice (ABN). It is crucial to understand the role of ABN in medical billing to get fully paid for rendered services. Healthcare providers issue ABN to the beneficiaries of Medicare and tell them about the services Medicare does not cover. Medicare reimburses healthcare providers for medically necessary services under the federal health insurance system. Similarly, providers must inform patients through ABN for procedures not covered under Medicare. In addition, medical providers need to explain why Medicare won’t pay for these services. Further, patients should be informed that they will be responsible for the total cost of these medical services.

What is ABN?

An Advanced Beneficiary Notice (ABN), also called waiver of liability, is a term that defines a notice from providers to the patients. But what does provider notify patients in ABN? Healthcare providers should tell and explain why Medicare won’t pay for these services. This notification is meant for patients with Original Medicare, not Medicare Advantage Plan. Likewise, under the Medicare rules for ABN, patients must know their financial responsibility and out-of-pocket expenses before the encounter. In the same way, it allows revenue cycle management experts to streamline billing while optimizing collections. Further, ABN cannot be sent to the patients that Medicare never covers.
If a healthcare practice is outsourcing medical billing services, the ABN explains the patient’s financial responsibility. In addition, the billing team has complete knowledge of the medical claims submitted to payers and patient collections. Since ABN acts as a warning that Medicare may not pay for services, there is a chance that Medicare will pay. So, patients receive care while signing the ABN and agree to pay if Medicare does not.

What Rules Govern ABN in Medical Billing?

The medical billing and coding team should be careful when using ABNs. Similarly, Medicare maintains control over ABNs and their proper use. In addition, the providers who outsource medical billing service to professionals must know that Medicare’s policies must be followed. However, if the Medicare policies that govern ABNs are not followed, providers will not be reimbursed for services. Therefore, it is essential to clearly understand the role of ABN in medical billing for optimal reimbursements.

Under Medicare’s defined rules, the ABN form must contain the following information:

Full name of the patient.
Provider’s name, address, and phone number.
Name of medical service that Medicare may not cover.
The reason the provider believes Medicare may not pay.
Estimated cost of medical service.

Here are some additional rules:

Advanced Beneficiary Notice may entail a single page or less.
ABN cannot be issued to a patient in an emergency medical situation.
Providers cannot notify ABN of patients being rushed to the hospital during a medical event.

ABNs and Appeals

There are specific rules that define when patients should receive ABN from providers. Similarly, how the ABN in medical billing should look is defined by Medicare. Additionally, if providers fail to follow the rules, patients are not responsible for paying for the care they receive. Here are some rules that show that patients are not responsible for the payments:
If the ABN is not clearly understood and it is difficult to comprehend the reasons behind it.

If the provider sends ABN to every patient without mentioning the reason.
If the ABN does not mention the actual service rendered to the patient.
If the ABN is signed after the date of the service provided to the patient.
If the ABN is sent during an emergency condition.
If the healthcare provider has no reason to believe why Medicare would deny reimbursement.

The Takeaway

Understanding the importance of ABN in medical billing helps providers get Medicare payments. It allows medical practitioners to avoid payment delays and inefficient workflows. In addition, an Advanced Beneficiary Notice should be shared with the patients before rendering the service. Keeping in mind all the Medicare rules that govern ABN helps physicians stay on top of their revenue cycle. Further, physicians can outsource medical billing services to professional teams to avoid payment delays from Medicare.