The American healthcare industry consists of so many complex terminologies that sometimes it feels impossible to keep track of all these terms and processes. And one of these terms is ABN. It stands for Advanced Beneficiary Notice and can be confusing for both patients and providers.
Understanding the intricacies of an ABN and how to utilize it is crucial for healthcare providers/professionals. In this blog, we’ll enlighten you about ABNs, the completion of an ABN form, and the communication process to ensure patient consent. Before we go into detail, let’s tell you what it is.
What is an Advance Beneficiary Notice or ABN?
An ABN, also known as an Advance Beneficiary Notice of Non-coverage, is a written notification issued by a healthcare provider to a Medicare beneficiary (patient) to inform them regarding coverage limitations or what services will not be covered under Insurance.
Simply saying, an ABN is a documented alert warning a patient that Medicare will not pay for the service or item required or requested. And that the patient will have to incur the costs.
A Few Fundamentals About ABN to Keep in Mind
ABNs or precaution alerts from the provider only apply to those having coverage from original Medicare. If a person is covered under Medicare Advantage Plans like PPO or HMO, then ABNs don’t apply. These coverage plans determine what services or items are covered by talking directly to providers.
ABNs are meant to inform the patient regarding the probability of services not being covered and don’t guarantee complete denial from Medicare. Simply put, it informs the beneficiary of the possibility and helps prepare them for potential expenses ahead. Medicare will review the claim and doesn’t reject it right away.
They pre-inform the patient about expected financial spending. By signing the ABN, the beneficiary agrees to the potential coverage limitations and that they may have to pay for the service or item. It helps them make an informed decision, i.e., to proceed with the service or not.
Information Included in an ABN
Entering all the required information in the ABN form is important for patient understanding and that the claim isn’t denied. Let’s tell you about the crucial information needed in an ABN.
Patient Information
It includes the patient’s full name, age, Medicare ID number, contact number, address, etc.
Provider Information
This includes information like the provider/practice name, address, phone number, etc., of the office/healthcare provider issuing the ABN.
Description of The Service/Item
Complete details of the service/item requested for include clearly identifying the service or item for which the coverage may not be possible.
Potential Non-Coverage
Explain the reason for potential non-coverage by Medicare. There could be many reasons at the back of it, like:
- Service is experimental or investigational.
- Service or item may’ve exceeded Medicare’s pre-approved limit.
- Service not deemed medically necessary.
Estimated Cost
An approximation of how much a patient may need to pay out of pocket in case Medicare denies it.
Patient’s Choice
The ABN must clearly include options a patient has, like:
- Reject the service in case they don’t want to pay out of pocket.
- Sign the ABN and agree with the terms like non-coverage of requested service/item and payment responsibility.
Role of ABN in Medical Billing
ABN’s have a significant role in medical billing for medical professionals serving Medicare patients. They have two primary purposes which are as follows.
They Safeguard the Practice from Financial Losses
To comprehend this point, consider the following example. Suppose you provided healthcare service to a person whose claim got denied because the service they got wasn’t covered by Medicare. If there was no ABN, you’re responsible to incur the charges.
In this situation, an ABN will protect you from paying the unexpected bill. These advanced notices eliminate the risk of payment dispute by informing the beneficiary upfront regarding potential limitations or non-coverage of a particular service/item.
In case Medicare denies the claims, an ABN signed by the beneficiary lets them know about their financial responsibility and frees the provider from the payment hiccups. It is proof of the patient’s consent to pay if the Insurance doesn’t cover the requested service/item.
Enables Beneficiary to Take Informed Decision
ABNs bring in the transparency factor, which holds immense significance in the healthcare industry. By going through the notification, they know the cost implications of a service/item before getting it. It promotes patient understanding and helps them make wise decisions.
Simply put, an ABN lets them know about potential coverage limitations and their financial responsibilities in case the service is rejected. It serves as clear communication and promotes trust by abnegating risks and billing disputes escalating in the future.
Other notable benefits of ABNs
- ABNs play a significant role in lowering claim denials. As they communicate and address the payment concerns before the service/item is delivered, your claim denial ratio can come down drastically.
- It also helps to achieve an optimized revenue cycle. An informed patient having complete information regarding financial responsibilities will result in fewer denials, swift payments, and an efficient revenue cycle.
- Transparent dealing and clear communication with the patient fosters strong relations with the patients. And ABNs do just that. They bring in trust factor and promote positive interactions and long-standing ties.
The Right Time for Using and Signing an ABN
Knowing the right time to use and sign an ABN is essential for healthcare providers. If you’re still not sure about these situations, we’ve explained them for you.
Service/Item Exceeding Coverage
If a service or item doesn’t fall within the scope of Medicare, i.e., cosmetic services and devices for cosmetic or experimental treatments, an ABN is required.
Service/Item Needing Approval
There are some services that do require pre-authorization from Medicare before they’re delivered. Here, an ABN serves as a caution for the patient regarding the potential for denial.
Services Reaching Frequency Limits
Sometimes, there are limits set on the frequency of a service, i.e., how often a service can be availed within a period. If the service/item required exceeds the limit, an ABN is required.
Voluntary ABNs
There are services and items that Medicare covers, still the healthcare provider uses an ABN to inform the beneficiary regarding the potential expenses. For instance, co-pays and deductibles linked to the service required.
How to Inform the Patient Regarding an ABN?
Communicating with the patient regarding an ABN can sometimes be a difficult task. However, communication is essential and must be carried out in a clear and concise way. Experts believe that transparency is the key to explaining ABN to a beneficiary.
Healthcare providers must start the communication by telling the patient what exactly an ABN is and its purpose. Talk about the significance of this document and how it is meant to notify about a service/item that Medicare may not cover.
Clearly Tell Them the Reason
Tell them whether Medicare covers the service. And why doesn’t it cover such services? The reasons could be that they aren’t deemed necessary, like cosmetic surgery, the requested service may have exceeded the frequency limit or it requires prior approval.
Provide them with a clear picture of the options they have
Based on the ABN submitted, they can decline the service if they don’t want to pay for it. Or they can sign the notification as an acknowledgment of limited coverage and that they will pay if Medicare doesn’t.
Give Them the Right Estimate
In such a case, when a patient requests a service/item requiring ABN, the healthcare provider must provide an honest and reasonable estimate of how much they’ll have to incur.
Make them feel at ease by answering any questions they may have and clarify their confusion regarding ABN and why Medicare doesn’t cover the specific service or the service/item.
Advance Beneficiary Notice and Appeals
Once a patient signs an ABN, they acknowledge the terms and conditions of Medicare and that Medicare may or may not cover a requested service/item. However, it doesn’t mean you have no recourse in case of coverage denial.
After signing the ABN, they can appeal to Medicare for service coverage. The purpose of an ABN is to inform the patient regarding the potential for non-payment. However, the ultimate decision to deny or accept the claim is with Medicare.
Understanding the reason behind the claim denial is vital as it helps to make a strong and successful appeal. The real reason for denial is documented in Medicare’s Explanation of Benefits (EOB) patients receive. There could be various reasons for denials, such as:
- Service/item not considered medically necessary.
- Service/item may have exceeded the pre-approved limit.
- Procedural errors in billing.
To ensure a successful appeal against Medicare’s decision, the beneficiary must gather all related documents that support the medical necessity and their service request. These could be doctor’s prescriptions, test reports, referral letters, etc.
Medicare has set out a specific procedure and timeframe for filing appeals against claim denials. The usual ways to file and initiate an appeal are online, via email, or a phone call to Medicare.
Conclusion
Understanding the concept and usage of an Advance Beneficiary Notice in the healthcare industry is very important. In essence, it empowers both healthcare providers and patients. This option allows healthcare providers to secure themselves from the risks and additional costs incurred during and after service provision.
While it informs the patients regarding the costs involved, this transparency helps them make informed decisions regarding their healthcare choices and costs. Lastly, ABNs are a communications tool and must never be considered as a barrier to healthcare services.
