Advance beneficiary notice (ABN)

An ABN is a warning with a signature line. CMS describes the Advance Beneficiary Notice of Noncoverage, Form CMS-R-131, as the notice that providers, physicians, practitioners and suppliers issue to a Medicare beneficiary in situations where Medicare payment is expected to be denied, in order to transfer potential financial liability to the beneficiary. The patient reads what is being offered, why Medicare may not pay and the estimated cost, then chooses whether to receive the service and accept the bill. Skilled nursing facilities use it for items and services expected to be denied under Part B.

It matters because without it the cost usually stays with the provider. If Medicare denies a service as not reasonable and necessary and no valid ABN was given before the service, the provider generally cannot bill the patient for it. With a signed ABN on file, the claim still goes to Medicare, the denial comes back as patient responsibility, and the practice can collect. The ABN also starts a paper trail the patient can use to appeal.

The mistake is issuing it wrong or issuing it everywhere. An ABN handed over after the service or with the cost left blank does not do its job, and giving one to every patient as a matter of routine defeats its purpose. Issue it only when there is a specific reason to expect a denial, for the specific service, before the service, and keep the signed copy with the encounter.