Anesthesia Coding Alert

ABNs tell the patient that Medicare is not likely to provide coverage of planned services and that she may be responsible for paying any noncovered portion. These forms are commonly used for recommended procedures for diagnoses that are not included on a Medicare contractor's local coverage determination (LCD) list. Generally, the patient must sign the ABN if she wants your specialist to provide a service. As Medicare recommends, "If a beneficiary refuses to sign a properly delivered ABN, the notifier should consider not furnishing the item/service, unless the consequences (health and safety of the patient, or civil liability in case of harm) are such that this is not an option."

You should use the new ABN when you expect Medicare will deny a claim for lack of medical necessity. The new ABN (form CMS-R-131) replaces both the previous ABN-G (for physicians) and ABN-L (for laboratories),but also incorporates the Notice of Exclusions from Medicare Benefits (NEMB) form. According to CMS rules, you must replace the NEMB with the new ABN, so you'll start using it in voluntary situations in addition to how you've always used an ABN.

Keep in mind: Non-covered services don't need an ABN because everyone knows they are not covered. The patient should have no expectation that Medicare will pay. Claims statutorily non-covered don't need an ABN, but claims not covered because of medical necessity do need an ABN.

Watch the calendar: Medicare states practices must be ready as of March 1, 2009, to use the newest ABN form. Without a valid ABN, you cannot hold a Medicare patient responsible for the denied charges, says Kara Hawes, CPC-A, with Advanced Professional Billing in Tulsa, Okla.

"The patient has to sign the ABN form prior to or at the time of service; otherwise the form is not valid," says Hawes. "When the claim is denied without an ABN,Medicare will not allow you to bill the patient for the service."

On the other hand, if the ABN is signed and modifier GA (Waiver of liability statement on file) is included with the billed code, the patient explanation of benefits (EOB) will state that the "physician may bill the patient for the service." This lets the patient know your anesthesiologist is authorized to bill for the service provided.

Remember: An incomplete form is useless, because you cannot hold the patient responsible for the service unless you have a valid ABN. Some examples of an invalid ABN include partially filled-out forms; not providing a cost estimate of the services at issue; not requiring the patient to indicate if she wants the procedure; or failure to obtain a signature.

When Medicate excludes the service, and you're using the new ABN as you would have used NEMB in the past,use modifier GY (Item or service statutorily excluded, does not meet the definition of any Medicare benefit or, for non-Medicare insurers, is not a contract benefit). You would also use modifier GY when you know Medicare does not cover the service and you need a denial explanation of benefits (EOB) before submitting to a secondary insurance carrier.

Statutory exclusions include, for example, uncovered physical exams and cosmetic procedures. Using the GY modifier will speed rejection allowing payment by a secondary insurer. With or without a GY modifier, the patient is liable for all charges.

Modifier GZ (Item or service expected to be denied as not reasonable and necessary) means that you didn't have the patient sign an ABN prior to the service that may be denied due to medical necessity, and thus, you cannot bill the patient if Medicare denies the service. "This means that an ABN should have been provided and signed prior to the service, but it was not," says Barbara J. Cobuzzi, MBA, CPC, CENTC, CPC-H, CPC-P, CPC-I, CHCC, president of CRN Healthcare Solutions in Tinton Falls, N.J.

FYI: You should never have to use this modifier, as the only advantage to using it is to avoid the potential for fraud and abuse charges. By using GZ you are telling Medicare that you don't expect to be paid.