Moving the HME Industry Forward

Billing/Reimbursement

ABNs – How to Properly Use and Pitfalls to Avoid – Part 2 of 3

June 23, 2014

AMARILLO, TX – The Centers for Medicare & Medicaid Services (CMS) requires Medicare health care providers and suppliers to provide Medicare beneficiaries with an Advance Beneficiary Notice of Noncoverage (ABN), Form CMS-R-131, if the provider thinks Medicare probably (or certainly) will not pay for the items or services because they are not medically necessary.

A provider that fails to deliver an ABN when required may not bill the beneficiary for the noncovered items or services. The requirement to provide an ABN to a Medicare beneficiary is limited to certain Medicare Part B services (outpatient only) and Medicare Part A items and services (limited to hospice services, home health agencies, and Religious Nonmedical Healthcare Institutions only).  However, providers are not required to provide Medicare beneficiaries an ABN for items or services that Medicare never covers. On its face, the ABN is a simple tool to provide Medicare beneficiaries with notice of noncoverage.

Below the surface, proper utilization of the ABN form can be difficult and improper utilization of the ABN form can result in thousands of dollars of nonbillable medical costs. This three part article furnishes providers with guidance to prevent some of the common ABN pitfalls and landmines, and help providers ensure proper liability is established prior to the provision of items or services to Medicare beneficiaries.

Part 1 discussed when an ABN should be issued and when the ABN is “effective.” Part 2 sets out how a provider should properly fill out “D,” “E,” and “F” on the ABN form and the record retention requirements that must be followed. Part 3 discusses when a provider can collect funds from a Medicare beneficiary for an item or service and when those funds must be returned. Part 3 also discusses the common issues that DME suppliers must address with ABNs.

How does a provider properly fill out Blanks D, E, and F on the ABN form?

To complete the ABN form, a provider must pay particular attention to Blanks D, E, and F.

Blank D

Blank D requires providers to list the specific items or services that the provider believes will not be covered by Medicare. CMS encourages providers to use one of the following descriptors in Blank D: item, service, laboratory test, test, procedure, care, or equipment. For expected partial denials, the provider is required to list the excess components of item or service for which denial is expected. Similarly, a provider must also list the specific components of any upgrades that may be denied, are expected to be denied, or will be denied. If an item or service that is offered—but expected to be denied—is repetitive or continuous, then the provider must specify the frequency or duration of the item or service to be provided on ABN form. When a provider reduces services, Blank D must specify with enough additional information to put the Medicare beneficiary on notice of the nature of the reduction. For example, “wound care supplies decreased from weekly to monthly” is sufficient, but “wound care supplies decreased” is insufficient.

Blank E: Reason Medicare May Not Pay

Blank E requires providers to explain in “beneficiary-friendly” language the reason the provider believes the item or service will not be covered by Medicare. A valid and effective ABN requires the provider to supply at least one reason for noncoverage. CMS has provided the following commonly used reasons for noncoverage: Medicare does not pay for the test for this particular condition, Medicare does not pay for this test as often as patient requests (denied as too frequent), and Medicare does not pay for experimental or research use tests.

Blank F: Estimated Costs

In order for Medicare beneficiaries to receive all information and make an informed decision, Blank F requires providers to disclose to beneficiaries an estimated cost for the item or service that Medicare is not likely to cover. In making an estimate, providers must make a good faith effort to determine a reasonable estimate for the items or services listed. Generally, CMS expects the provider’s estimate to fall within the greater of $100 or twenty-five (25) percent of the actual cost.

What record retention requirements does CMS place on ABN forms?

CMS requires that providers retain all ABN forms for five years from the date of service, but only if state law has not established requirements for medical record retention. If a beneficiary declines care, refuses to choose an option, or refuses to sign the ABN, the provider must retain (either in hard or electronic format) a record of the ABN. If a Medicare beneficiary signs the ABN and thereafter changes his or her mind, then the Medicare beneficiary must annotate the ABN to reflect a clear indication of his or her decisions. The provider or the beneficiary may annotate the ABN, but the beneficiary must sign, date, and return a copy of the ABN to the provider for its records.

Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown
& Fortunato PC, a law firm based in Amarillo, Tex. Matthew J. Agnew,
JD, is an attorney with the Health Care Group of Brown & Fortunato
P.C. They represent pharmacies, HME companies, and other health care
providers. Baird can be reached at (806) 345-6320 or jbaird@bf-law.com.
Agnew can be reached at (806) 345-6332 or magnew@bf-law.com.

Jeff Baird will be presenting a webinar for AAHomecare on June 26, 2014. See information listed below:
AAHOMECARE’S EDUCATIONAL WEBINAR
Arrangements that HME Suppliers can Legally Enter into with Physicians and Other Referral Sources

Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato, P.C.
Thursday, June 26, 2014
2:30-4:00 p.m. EASTERN TIME

Sign up now for Arrangements that DME Suppliers can Legally Enter Into with Physicians and Other Referral Sources on Thursday, June 26, 2014, 2:30-4:00 pm ET, with Jeffrey S. Baird, Esq., of Brown & Fortunato, PC.

Please note: AAHomecare has adopted a new online meeting registration system; please contact Ika Sukh at ikas@aahomecare.org if you experience any difficulties registering.

FEES: Member: $99.00  Non-Member: $129.00