1. ADVANCED BENEFICIARY
NOTIFICATION (ABN)
TRAINING
Sharon Evans
T.E.A.M Associates
August 2011
Note: This document was created as a training tool
based on 2011 ABN rulings. Please check the current
year requirements to ensure your staff is provided the
most updated tools to the ABN compliance standards
in combination to your company policies

2. Introduction of Using ABNs
Advanced Beneficiary Notices (ABNs)-Is a written notice for a
provider/supplier to give to a Medicare beneficiary before items/services
are rendered and when the provider/supplier believes Medicare probably
or certainly will not pay for some or all of the items or services.
- ABNs allow beneficiaries to make an informed decision to receive items for
which they may have to pay out of pocket or through other insurance coverage.
- The ABN serves as proof the beneficiary had knowledge prior to receiving the
service that Medicare might not pay.
- It allows the beneficiary to better participate in his/her own health care
treatment decisions.
- ABNs are documents that can benefit your company if used correctly.
The ABN was previously referred to as a Waiver of Liability.

3. Terminology
 Medical Necessity - Is defined as services that are reasonable and necessary
for the diagnosis/treatment of an illness/injury or to improve the function of a
malformed body and are not excluded under another provision of the
Medicare program.
 Limited Coverage - Coverage of certain procedures is limited by the
diagnosis. If the diagnosis listed on the claim is not the same as one of those
listed as covered for the procedure, the procedure is denied.
 Mandatory Use - When Medicare is expected to deny payment for the item or
service because it is not reasonable and necessary under Medicare program
standards.
 Voluntary Use - Care that is statutorily excluded, (personal comfort
items, cosmetic surgery, immunizations, etc.) The ABN can be issued
voluntarily as a form to notify the beneficiary of items not covered.
 “Extended Course of Treatment” – Identifies all items and duration of the
period of treatment which the health care providers supplier believes Medicare
will not pay.

4. Terminology
 The Notice of Exclusions from Medicare Benefits (NEMB) - Is a form
that is used when a service or supply is statutorily excluded or not
considered a Medicare benefit.
 The use of the NEMB form is optional. Your company may use their
own process for communicating this information to beneficiaries or
use the current ABN form.
 A claim will still need to be filed at the beneficiary's request.
 The GY modifier will be used and the beneficiary will be liable for
all charges related to non-covered items or services.

5. Terminology
 Medicare Replacement Plan - Medicare is a federally administered
program, with most of its beneficiaries receiving benefits directly from the
federal government. These programs are known as "Medicare+Choice" or
"Part C" plans health plans.
 Medicare Advantage Plans - Are required to offer coverage that meets or
exceeds the standards set by the original Medicare program, but they do
not have to cover every benefit in the same way.
 Modifiers
 GA- Waiver of Liability Statement Issues as Required
 GX- Notice of Liability Issued voluntary
 GY- Notice of Liability Not Issue, Not Required
• GK- Notice of Actual Item Orders When an Upgraded Item is Provided
• GZ- Item or Service Expected to be Denied as Not Reasonable and necessary
or services

6. Terminology
 Refund Requirements (RR) - Is also a financial liability provision of
the Medicare law provided under the Social Security Act for all
assigned and unassigned claims for medical equipment and supplies.
 The significant difference between the RR and LOL is that under
RR, the beneficiary may not be held liable for payment unless they
actually sign the ABN.
 Limitation on Liability (LOL) - Is a financial liability provision of the
Medicare law that is provided under the Social Security Act for all
assigned claims for Part B Medicare services.
 LOL provisions require that the beneficiary be notified if Medicare will
likely deny the claim for services as un-reasonable and/or unnecessary ; the
provision, however, does not require a beneficiary signature.
 If notice is not given, providers may not shift financial liability. The
requirements for LOL may be met through the use of the ABN.

7. Acceptable ABNs
 There are two uses for the ABN: Limit Liability
 The use of the ABN is to Limit the Liability protecting your
company, while informing the beneficiary when there is a probable
indication that an item or service will be non-covered.
 The ABN will allow your company to collect money from the
beneficiary on services that were listed on the ABN that may be
denied.
 Mandatory ABNs are used before providing items and/or services that
are expected to be denied by Medicare because it is not reasonable and
necessary under Medicare provisions.
Common reasons:
 Experimental and investigational
 Not indicated for diagnosis and/or treatment in this case
 Is not considered safe and effective
 Exceeds the number of services that Medicare allows in a time
period

8. When an ABN is Not Needed
 ABNs are also not required when Medicare is expected to deny
payment for an item or service which may be a Medicare benefit
but for which the coverage requirements are not met. (example:
location of service)
 Do not confuse coverage requirement with coverage criteria;
anytime a denial is expected due to a lack of medical
necessity, an ABN is needed.
 Since the new ABN form may be used to voluntarily notify
beneficiaries of non-coverage it is good business practice to use
them to notify beneficiaries of non-coverage for any reason.
 ABNs, however, are not required in instances where Medicare is
expected to pay for the item or service.

9. When an ABN Not Needed
 Voluntary ABNs are not needed for statutory excluded items and
services such as personal comfort items or cosmetic surgeries.
 Previously, the Notice of Exclusion from Medicare Benefits
(NEMB) was used for providing voluntary notification for those
types of services.
 The new version of the ABN can now be used for this purpose
and eliminates the widespread need for using the NEMB.

10. Acceptable ABNs
 ABNs are designed for Medicare beneficiaries, dually-eligible
Medicare and Medicaid, or for coverage plans with Medicare as
the secondary plan only.
 They are not to be used for Medicare advantage beneficiaries or
non-enrollees. These plans may have their own form of
communication. Please consult with the plan requirements.
 The ABN should be given anytime your company believes that an
item or service may be denied or not covered.
 They cannot be routinely given to every beneficiary.
 A single ABN covering an “extended course of treatment” is
acceptable if all items/services that are expected to be denied are
identified with the duration of need.
 There is a one year limit for an extended ABN.

11. Acceptable ABN’s
 To be acceptable, an ABN must be on the approved form
CMS-R-131. The ABN must also meet the following criteria:
 Clearly identifies the item or service
 Contains the statement “the supplier believes Medicare is likely
to deny the claim”
 Gives the reason why Medicare will likely deny the claim
 Signed and dated by the beneficiary
 Record the estimated cost to ensure the beneficiary has all
available information to make an informed decision before
services are dispensed
- In general, we would expect the estimate to be within in $100 or
25% of actual cost, which ever is greater. Identification of these
costs can be “between $100-$300” or “No more than $500”.

12. Valid Delivery of an ABN
 Delivery of an ABN occurs when the beneficiary or authorized
representative both received the notice and can comprehend its
contents.
 Staff must verbally review the form with the beneficiary or authorized
representative and answer any questions that are raised during the
review.
 Beneficiary must be able to completely understand the document. All
of the beneficiary's questions must be sufficiently answered by your
company.
 Delivery of the ABN must occur prior to the services actually being
rendered. ABNs should be delivered to the beneficiary or an authorized
representative by the acceptable media.
 The beneficiary must be notified far enough in advance of receiving
services so they can make a rational, informed decision without undue
pressure.

13. Valid Delivery of an ABN
 Acceptable forms of notice, are by phone, mail, secure fax
machine, or internet email.
 Telephone notice is not sufficient unless the content of the
conversation can be verified and the beneficiary doesn't
contest it.
 It must be followed immediately with a written notice and a
signature is obtained after phone or in person contact. In
that instance the time of the telephone notice would be
accepted as the time of the ABN delivery.
 The original ABN should be kept on file with a copy going to
the beneficiary.
 Once signed by the beneficiary, it cannot be modified or
revised. If there are changes a new form must be obtained.

14. Upgrades to Services/Products or
Quantities Above Allowed Standards
 ABNs are also used when the beneficiary wishes to
obtain upgraded equipment or supplies.
 In this instance the ABN is used when the beneficiary has a
prescription for an item or service and they would like a
more expensive model, a model that contains more
components or features, or a quantity of supplies greater
than what their physician ordered.
 When an ABN is used for upgrade purposes, the difference
in price between the ordered item and the upgraded item
can be collected directly from the beneficiary.
 The upgraded code must be in the same class as the
ordered item.

15. Sample
 A – Notifying Company
 B - Patient Name
 C - Account Number
 D1, D3 - Identify Items/Service
 D2-Item Name/Code/Qty
 Supplies/Code/Qty
 Dispensing Schedule and Quantity 2 per
pair per month for 1 year
 E - Clear and Precise Reason (ensure the
explanation meets standard)
 F - Estimated Cost of Each item (Example)
 Billed Rate: $850.00
 Estimated Allowance: $550.00
 G - Patient must select choice (can not be
completed by supplier)
 H - Notification expressed by the items in
(D), are covered under this document for a 1
year period.
 J - Dated the day of service or prior to services
rendered.
 *More descriptive field and requirements can
be found on CMS-website.

16. Filling Out an ABN
 There are 10 blanks for completion on this version of the ABN, labeled
from (A) through (J).
 The labels may be removed before use and this is recommended.
 (A) The header of the ABN should be customized with your company's name,
address, and phone number. In addition, your company's logo may be added to
the header area. (it is recommended the logos are black and white, they must be
legible.
 Certain portions of the ABN must be completed for the ABN to be a
valid document.
 (B) The beneficiary’s name which is labeled as identifier for the patient
receiving the services/products.
 (C) Identification Number should be filled in at the top of the form.
 The identifier used should be an identification number for the beneficiary
that helps to link the notice with a related claim when applicable. This field
is optional. The beneficiary's Medicare number or HICN is no longer used.

17. Filling Out an ABN
 (D) The first portion that must be filled out for validity in
the ABN notification includes the each items/services .
 Notice that under the second section with the indicator of (D)
there is no title. This may be filled in by your company and can vary
with clear wording. Some common titles are:
item(s), service(s), test(s), procedure(s), equipment and/or
supplies.
 The equipment or supplies to be provided must be spelled out
sufficiently so that the beneficiary may understand what supplies
are being furnished. The sole use of HCPCS codes is not an
acceptable practice.
 (E) The reason for denial.
 The reason for Medicare denial must be specific and cannot be a
generic statement such as "We never know if Medicare will pay for
this service or not covered.”

18. Filling Out an ABN
 (E) (continued…) The following statements may be used as
reasons why Medicare is likely to deny payment:
 Medicare does not usually pay for this service or supply more often
than every 6 months.
 Medicare does not pay for services or supplies which it considers to
be experimental or for research use.
 Medicare does not pay for this item or service for your condition.
 (F) The Estimated Cost - We will populate our billed rate
and Medicare’s estimated allowance.
 Your company must add in the estimated cost of the equipment in
the space provided on the ABN.

19. Filling Out an ABN
 The ABN must be filled out in entirety prior to having the
beneficiary sign the document.
 Suppliers are prohibited from obtaining beneficiary
signatures on blank ABNs and then completing the ABN at
a later time.
 (G) The beneficiary will need to personally select an option
listed under this section.
 (1) They can either choose that they want to receive the items or
services and have Medicare billed.
 (2) They can choose to receive the items or services and request
that Medicare not be billed.
 (3) They can select that they have decided not to receive the
items or services.

20. Filling Out an ABN
 The Patient will need to check an option and then sign and
date the ABN.
 If no option is selected the ABN is deemed invalid.
 The beneficiary may sign the form or if they are unable to
sign the form, it can be signed by an “authorized
representative” (see CMS standards)
 Directly under the options section is a spot for additional
information. (H) This space may be used for additional
clarification that will be of use to beneficiaries.

21. Collection of Funds
 A beneficiary’s agreement to be responsible for payment on
an ABN means that the beneficiary agrees to pay for
expenses out-of-pocket or through any insurance other
than Medicare.
 The provider may bill and collect funds for non-covered
items/services immediately after an ABN is signed.
 If Medicare ultimately denies payment, the provider retains
the funds collected.
 However, if Medicare pays all or part of the claim for items/services
previously paid by the beneficiary or if Medicare finds the provider
liable, the provider must refund the beneficiary the proper amount in a
timely manner.

22. Beneficiary Refusal to Sign ABN
 If a beneficiary refuses to sign an ABN,
items/service(s) may still be provided and paid by
the beneficiary on assigned claims.
 This is a business decision which your company must
make and many suppliers will not furnish supplies if a
beneficiary refuses to sign the form.
 The ABN must be noted with the signature of a
witness. The claim would then be submitted with a
GA modifier to indicate the beneficiary was notified
that Medicare would likely deny the claim.
 The "Limitation of Liability" applies which requires
notification but no signature. Member will not be liable.

23. Beneficiary Refusal to Sign ABN
 If Medicare denies the claim, the beneficiary can be billed
for services.
 On non-assigned claims the "refund requirement" applies
which requires notice and signature. Therefore, if the
beneficiary refuses to sign and the service is provided, the
beneficiary may not be billed.
 If the beneficiary refuses to sign and declines service, they
can choose option 3 on the ABN and services will not be
provided.
 Your company can choose to refuse service at any
time.

24. Billing Modifiers
 GA - Is used when an ABN is properly completed and
signed by the beneficiary . This modifer will be used to
inform Medicare that an ABN is on file.
 Use of the modifier and the accompanying ABN will protect
your company from financial liability if the claim is denied
and the beneficiary will be responsible for the full charge.
 If the GA modifier is not appended to the claim and the claim
is denied for medical necessity, your company is liable for the
charge and may not bill the beneficiary.

25. Billing Modifiers
 GZ - Is used if your company expects a medical
necessity denial but does not have a signed ABN on
file.
 In most instances, use of this modifier will not protect your
company from financial liability and the beneficiary will
not be responsible for the charges.
 A different modifier is to be used when billing for
upgraded equipment.
 GA - Is used on the upgraded item placed on the claim
first. GK - will be used for the item actually ordered and
placed on the claim directly under the upgraded item.

26. Billing Modifiers
 GZ - If no ABN is on file for the upgraded item, the
upgraded item is still listed first on the claim. With GK
on the item that was actually ordered on the next
claim line.
 GL - If your company is billing for an upgraded item
for which you are choosing to provide for free, you can
bill only for the item that was ordered.
 GY - Is used to indicate a service that is statutorily
excluded or non-covered.
 The claim doesn't have to be filed to Medicare unless the
beneficiary requests that it be submitted.
 The ABN or NEMB can be used for these services. The
beneficiary will be financially liable for all charges.

27. Summary
 ABNs can protect your business from financial liability and
compliance risk when used correctly.
 Other health plans have similar rules and documents. Each
plan should be consulted for the appropriate forms and rules.
 ABNs also support customer satisfaction as customers are able to
make informed decisions regarding their supply and equipment
purchases.
 I hope this has supported your team with more knowledge
necessary for using ABNs correctly, leading to greater beneficiary
satisfaction, generating secure and compliant revenue.

28. THANK YOU
Created by: Sharon Evans
T.E.A.M Associates