Transparency and informed decision-making can empower patients to navigate this complex healthcare system. Imagine you’re a patient about to undergo a medical service/procedure that the insurance might not cover. How would you feel if you were informed of this possibility in advance, allowing you ample time to decide whether to proceed or explore alternative options? That is where the Advance Beneficiary Notice (ABN) bridges the gap between medical care and financial responsibility. Often, I hear in doctors’ offices staff ask what an ABN is. I never heard of it before. Or if they have an ABN, it is an expired one or was not filled out correctly or signed by the patient. You’re leaving the provider’s office unable to be reimbursed for those services.
In this blog post, we’ll disentangle the confusion of an ABN, shedding light on its significance and implications and why educating staff on the importance of explaining what the form is, filling it out in its entirety accurately and obtaining a signature on this document can be a game-changer when it comes to reimbursement for your office or organization.
What is an ABN?
An Advance Beneficiary Notice (ABN) is a written notice that healthcare providers, practitioners, or suppliers in the U.S. give to Medicare beneficiaries before providing a service or item for which Medicare will likely deny payment. An ABN informs the beneficiary that they may have to pay for the service or item out of pocket if Medicare doesn’t cover it.
The purpose of an ABN is to notify Medicare beneficiaries of their potential financial responsibility and to obtain their acknowledgement of this possibility before proceeding with the service. It allows beneficiaries to make informed decisions about receiving the service, knowing they might be responsible for the cost.
CMS has renewed the mandatory Advance Beneficiary Notice (ABN) form with a new expiration date of 1/31/2026, which took effect on 6/30/2023. Note that the ABN forms and instructions on the CMS website are provided in English and Spanish. Patients must be given the most up-to-date ABN form to fill out. If the ABNs are filed in your EHR (Electronic Health Record), you want to ensure that someone is in charge of replacing the forms and ensuring they’re current.
There are different ABNs for different places of service and episodes of care:
- FFS ABN
- FFS Home Health Change of Care Notice
- FFS Skilled Nursing Facility
- FFS Hospital Issued Notices
And much more listed on CMS’s website.
When To Utilize an ABN
ABNs are typically used for services or items that are considered “not medically necessary” by Medicare, services that are considered “experimental” or “investigational,” or when a provider believes that Medicare is likely to deny payment for other reasons. An ABN must be written in writing and explain why Medicare might not cover the service or item. It must include an estimate of the cost and indicate whether the beneficiary accepts financial responsibility if Medicare denies payment.
After receiving the ABN, the beneficiary can decide whether to proceed with the service or item and assume financial responsibility if Medicare denies coverage, or they can choose not to receive the service. The provider must ensure the beneficiary understands and signs the ABN. The signed ABN proves that the beneficiary was aware of the potential non-coverage and their decision to proceed. The beneficiary may appeal the decision if Medicare denies the service. The provider can bill the beneficiary for the service or item if the appeal is unsuccessful.
ABNs are essential to ensure transparency and communication between providers and Medicare beneficiaries. They help beneficiaries understand their potential financial obligations and make informed decisions about their healthcare. However, providers must use ABNs appropriately and in compliance with Medicare regulations to avoid potential issues.
Why should a patient sign an ABN?
Having a patient sign an Advance Beneficiary Notice (ABN) is important for several reasons, primarily centered around transparency, communication, and financial responsibility within the healthcare system, especially when dealing with Medicare coverage. Here are the key reasons why obtaining a patient’s signature on an ABN is crucial:
- Informed Decision-Making: An ABN informs the patient that a particular service or item may not be covered by Medicare, potentially leading to out-of-pocket costs. By signing the ABN, the patient acknowledges their awareness of the potential non-coverage and can decide whether to proceed with the service or item.
- Patient Empowerment: Providing patients with clear information about potential financial obligations empowers them to participate in healthier health decisions. They can weigh the benefits and risks of receiving the service or item, considering their medical needs and financial situation.
- Avoiding Surprises: An ABN helps prevent unexpected bills for patients. By signing the ABN, patients are aware of the potential costs in advance, reducing the likelihood of frustration or confusion if Medicare denies coverage.
- Compliance and Regulations: Medicare regulations require providers to notify patients of non-covered or potentially non-covered services. Obtaining a signed ABN demonstrates that the provider has fulfilled their responsibility to communicate this information to the patient.
- Billing and Reimbursement: If a patient receives a service that Medicare denies coverage for and signs the ABN, the provider may bill the patient directly. The signed ABN is a legal agreement between the provider and the patient, allowing the provider to seek payment.
- Documentation: A signed ABN serves as documented proof that the patient was informed about the potential non-coverage and chose to proceed with the service or item despite the possibility of having to pay for it. This documentation can be crucial in case of disputes, audits, or appeals.
- Legal Protection: A signed ABN can protect the provider from legal disputes when patients might later claim they were not informed about potential costs. It demonstrates that the patient was given the necessary information to decide.
- Provider-Patient Relationship: Open communication about potential costs fosters trust and transparency between providers and patients. Patients are more likely to appreciate honesty and respect for their financial well-being.
Essentially, having a patient sign an ABN ensures that patients are fully informed about the potential financial implications of their healthcare decisions. It respects patients’ autonomy, helps them make informed choices, and establishes a clear understanding of the financial responsibilities associated with the services they receive.
Additional tips to keep in mind with ABNs:
- If alternative covered options are available, they should be explained to the patient. The patient can then make a choice based on the information provided.
- The ABN should clearly state the estimated service cost, procedure, or treatment. This helps the patient understand the potential financial responsibility if Medicare denies coverage.
- Patients should never be coerced or pressured into signing an ABN. The decision to sign should be voluntary and informed.
- The ABN should be written in clear and understandable language. Patients should have the opportunity to ask questions and seek clarification if needed.
- The healthcare provider and the patient should retain copies of the signed ABN. This documentation is essential for billing and dispute resolution purposes.
The ABN is essential for patients and providers with the knowledge they need to make informed choices. A patient has the right to understand the potential financial implications of the services they receive. The ABN also safeguards the provider’s commitment to open communication and ethical care.
Remember, the ABN is not just a piece of paper; it’s a bridge connecting the world of medicine with the world of financial reimbursement. It empowers us to weigh the benefits against the costs, and patients can have meaningful conversations with their healthcare providers and approach their medical decisions confidently.
Whether you’re a patient or a provider, embrace the ABN as a tool for fostering trust, mutual respect, and shared responsibility. Let the knowledge gained from this guide serve as a compass when navigating healthcare choices. Staff must understand the significance of the ABN and fill it out accurately for proper reimbursement for the office and transparency with the patients.
To schedule training for your organization or private practice providers’ clinical and billing staff, email us today at email@example.com or visit the website and fill out the “contact us” form.