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On April 4, 2023, the Office of Management and Budget (OBM) approved an updated Advance Beneficiary Notice of Non-coverage (ABN) form CMS-R-131.[1] Providers can continue using the current ABN form with an expiration date of June 30, 2023.[2] However, all providers are mandated to use the new ABN starting on June 30, 2023, which has an expiration date of January 31, 2026.[3]  Below is an overview of the ABN and when providers should use it.

Providers, physicians, practitioners, and suppliers (notifiers) of Medicare (fee-for-service “FFS”) beneficiaries must issue the ABN Form in scenarios when the Medicare payment is expected to be denied.[4] Essentially, Medicare requires notifiers to notify beneficiaries before providing an item or service if the notifier anticipates that Medicare will deny payment for services rendered for any of the reasons listed below, which would shift the financial responsibility for payment to the beneficiary.[5] If Medicare rejects the claim, the ABN is a mechanism for notifiers to show that (1) the beneficiary knew about the potential non-coverage in advance of the services being rendered, and (2) the beneficiary agreed to accept financial responsibility for these items or services.[6] Providers must comply with the ABN requirements, or they could be financially liable or at risk for possible sanctions.[7]

 The notifier should use an ABN when:

• Items or services are not reasonable or necessary;
• Items or services violate the prohibition on unsolicited telephone contacts;
• The medical equipment and supplies supplier number requirements are not met;
• The medical equipment or supplies are denied in advance;
• Items or services are custodial care;
• It is a hospice patient who is not terminally ill;
• The home health services requirements are not met (they are not confined to the home or their home, or there is no need for intermittent skilled nursing care);
• Items and services that are covered under a personalized prevention plan services that are performed more frequently than indicated under the coverage guidelines which are not reasonable and necessary for diagnosis or treatment or to improve functioning;
• When a noncontract supplier provides an item included in the DMEPOS CBP for a CBA; and
• If Medicare considers the item or services to be experimental.[8] 

With these circumstances in mind, a notifier should be aware of ABN Triggering Events, which may prompt the need to issue an ABN to a Medicare beneficiary in advance of rendering the services.[9] OMB has approved the ABN Form CMS-R-131 as the standard written notice. If this notice is not used as required, it may be deemed invalid, or the notifier may be held responsible for the goods or services in question and the Medicare beneficiary cannot be charged.[10]

There are several other considerations to keep in mind while completing an ABN.[11] For instance, notifiers ought to retain the ABN if there is any question regarding the beneficiary’s knowledge and acceptance of potential financial liability.[12] A beneficiary who accepts financial responsibility through a valid ABN may be held financially responsible for the noncovered items or services.[13] However, if a valid ABN is not obtained prior to the items or services being rendered, the Medicare beneficiary cannot be charged.[14] Also, the notifier is not bound to the Medicare fee schedule and may instead charge the notifier’s usual and customary price for that product or service.[15] If a notifier knew or should have known that Medicare would not pay and fails to obtain an ABN or issues an improper ABN, the notifier will be financially liable for the goods or services.[16] Notifiers are forbidden from taking funds from a beneficiary where a proper ABN has not been obtained and must promptly return any money paid by the beneficiary.[17] Further, CMS also has the discretion to impose sanctions against a notifier.[18]

For more information, check out the Instructions, Form, and Medicare Claims Processing Manual, or contact Amanda L. Waesch, Esq. at alwaesch@bmdllc.com or 330-253-9185. This was written with the help of BMD Law Clerk, Nicolas Oehler. 

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[1] FFS ABN, CMS.Gov (April 17, 2023 12:00 PM), https://www.cms.gov/Medicare/Medicare-General-Information/BNI/ABN.

[2] Id.

[3] Id.

[4] Id.; Medicare Claims Processing Manual Chapter 30 - Financial Liability Protections (Jan. 1, 2022), https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c30.pdf.

The ABN Scope includes:

The ABN is an Office of Management and Budget (OMB)-approved written notice issued by healthcare providers and suppliers for items and services provided under Medicare Part B. With the exception of DME suppliers, only healthcare providers and suppliers who are enrolled in Medicare can issue the ABN to beneficiaries. The ABN is given to beneficiaries enrolled in the Medicare FFS program. It is not used for items or services provided under the Medicare Advantage (MA) Program or for prescription drugs provided under the Medicare Prescription Drug Program (Part D). Skilled Nursing Facilities (SNFs) issue the ABN for Part B services only. The Skilled Nursing Facility Advance Beneficiary Notice of Non-coverage (SNF ABN), CMS Form 10055, is issued for Part A SNF items and services.

[5] Medicare Claims Processing Manual Chapter 30 - Financial Liability Protections, supra note 4.

[6] Id.

[7] Id.

[8] Id.; Also note, that there is optional uses for ABN. For instance, items or services that are either legally exempt from Medicare coverage or many treatments that fall short of a technical benefit requirement, ABNs are not necessary. However, CMS strongly advises notifiers to issue the ABN for items and services that are never covered, such as: Services that do not fall under the Social Security Act's 1861 definition of a Medicare benefit; Services that are expressly excluded from coverage under 1862 of the Social Security Act.

[9] Id.; ABN Triggering Events are defined as the following:

1. The first is Initiations. Defined as “The beginning of a new patient encounter, start of a plan of care, or beginning of treatment.”
2. The second, is Reductions. “A reduction occurs when there is a decrease in a component of care (i.e. frequency, duration, etc.). The ABN is not issued every time an item or service is reduced. But, if a reduction occurs and the beneficiary wants to receive care that is no longer considered medically reasonable and necessary, the ABN must be issued prior to delivery of this non-covered care.
3. The last is Terminations. Defined as “. . . the discontinuation of certain items or services. The ABN is only issued at termination if the beneficiary wants to continue receiving care that is no longer medically reasonable and necessary.”

[10] Id.

[11] Id.; For example, if the beneficiary changes their mind or if the beneficiary refuses to complete or sign the notice. The notifier should provide the previously completed ABN to the beneficiary and ask them to annotate the original ABN if the beneficiary changes their mind after filling out and signing the ABN. Along with the beneficiary's signature and the date of annotation, the annotation must clearly state the beneficiary's choice of the new alternative. If the notifier cannot provide the beneficiary the ABN in person, they may annotate the form to reflect the beneficiary's updated preference and then promptly send the beneficiary a copy of the annotated notice for them to sign, date, and return. A copy of the annotated ABN should be given to the recipient as soon as practicable in all scenarios. If a relevant claim has already been made, it should be amended, or even cancelled, to reflect the beneficiary’s new preference. When the beneficiary declines to select an option or sign the ABN as required, the notifier should annotate the original copy of the ABN to reflect the refusal to sign or select an option. Although it is optional, the notifier may also name any witnesses to the refusal on the notice. If a beneficiary declines to sign an ABN that has been legally provided, the notifier should think about not providing the good or service, unless doing so would put them in risk of their legal liability or patient's safety. In any scenario, the notifier should maintain the original copy of the annotated notice in the patient's file and give a copy of the annotated ABN to the beneficiary.

[12] Id.; “In general, it is 5 years from discharge/completion of delivery of care when there are no other applicable requirements under State law. Electronic retention of the signed paper document is acceptable.”

[13] Id.

[14] Id.

[15] Id. When the entire payment is made through bundled payments, notifiers are not permitted to issue ABNs with transferring financial responsibility to beneficiaries. In principle, ABNs cannot be utilized when Medicare has already paid in full, and the beneficiary would otherwise not be responsible for the cost of the service.

[16] Id.

[17] Id.

[18] Id.