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Advanced Beneficiary Notice (ABN)

An Advanced Beneficiary Notice (ABN), also known as a waiver of liability, is a document signed by the patient indicating that you have explained to him/her that Medicare may not cover the item and why they may not cover it (also, what the item is). This allows financial responsibility to be assigned to the patient. This document must clearly outline why you believe that the item may not be medically necessary and be signed and dated before the patient receives/accepts the equipment. Once you have obtained the patient's signature, you may signify this by using a GA modifier on the claim that you send to the DMERC. This way, if the item is indeed denied, Medicare will permit you to bill the patient for the item by using a PR (patient responsibility) group code. An ABN is not required for non-assigned claims, but it may be used to show that you believe the item will not be covered. It is also not necessary for items that are listed as non-covered by Medicare anyway; the patient is already liable for these items.

The ABN is an important document for you to utilize, because it will help to protect you from financial liability in cases where you know in advance that an item is likely to be denied. There are, however, several things that you need to keep in mind when using ABN's. Medicare does not condone having waivers signed for every item that you distribute. Having a waiver signed indicates that you are familiar with Medicare's rules and regulations and are able to judge when a piece of equipment and/or supplies will be considered not medically necessary. Therefore, you should only obtain this document when you feel this will be the case. Remember that the patient can choose whether to accept the item or not before signing the ABN, but if he/she accepts the item, then he/she will be held responsible for it.

The ABN can be used for items that you believe may be downcoded. If there is an ABN on file, the patient may be held responsible for the difference between the item billed and the item approved. The ABN also may be used if you determine in advance that the patient has same or similar equipment. Since Medicare will not pay for the same item again, the patient is financially responsible for the new one.

The ABN must be kept in the patient's file after you receive the signature as proof of your right to bill the patient for items that are not medically necessary. If you keep on top of Medicare's policies, you should be able to determine what items will not be covered, and by using ABN's appropriately, save yourself from having to write off claims in the future.

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