Medicare patients may be billed for services that are clearly not covered. For example, routine physicals or screening tests such as total cholesterol or when there is no indication that the test is medically necessary. However, when a Medicare carrier is likely to deny payment because of medical necessity policy (either as stated in their written Medical Review Policy or upon examination of individual claims), the patient must be informed and consent to pay for the service before it is performed. Otherwise, the patient has no obligation to pay for the test.
An Advance Beneficiary Notice (ABN; sometimes called a patient waiver form) is used to document that the patient is aware that Medicare may not pay and has agreed to pay the provider in the event payment is denied. Each ABN must be specific to the service provided and the reason that Medicare may not pay for the service. Blanket waivers for all Medicare patients are not allowed.
The CPT code modifier, -GA (Waiver of Liability Statement on file), is used to indicate that the provider has notified the Medicare patient that the test performed may not be reimbursed by Medicare and may be billed to the patient.
An ABN (Waiver of Liability) must:
- (a) be in writing;
- (b) be obtained prior to the beneficiary receiving the service;
- (c) clearly identify the particular service;
- (d) state that the provider believes Medicare is likely to deny payment for the service;
- (e) give the reason(s) that the provider believes that Medicare is likely to deny payment for the specific service; and
- (f) include the beneficiary’s signature and date.
Routine notices to beneficiaries that do nothing more than state that Medicare denial of payment is possible, or that the provider never knows whether Medicare will pay for a service, will not be considered acceptable evidence of advance notice. Unacceptable practices include (a) giving notice for all claims or services; (b) failing to list the specific reason or rationale for likely denial; and (c) failing to state the particular service which Medicare is likely to deny.
The sample ABN shown meets the statutory requirements as outlined above.