Practice Management Alert

Billers have been waiting for months to see if CMS would actually release a new advance beneficiary notice (ABN) form that would make their lives easier. In March, you finally got your answer.

CMS unveiled its new ABN, which not only 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.

If you dread having to decide whether an ABN or an NEMB is appropriate for your physician's services, the new ABN form will ensure those worries go away.

CMS expects this new, combined form to "eliminate any widespread need for the NEMB in voluntary notification situations," according to the new ABN Form Instructions document.

Old way: In the past, you were instructed to use ABNs only for procedures that Medicare might not cover due to lack of medical necessity. If Medicare statutorily excluded the procedure from Medicare benefits, you turned to the NEMB. You were able to use NEMBs for services such as cosmetic surgery, which Medicare never covers. Keep in mind that Medicare didn't require that you use the NEMB, whereas it requires ABNs.

New way: Now CMS will accept the new ABN form for either purpose, noting in its ABN instructions that "the revised version of the ABN may also be used to provide voluntary notification of financial liability."

Don't worry: Although Medicare carriers began accepting the new ABN form as of March 3, CMS has implemented a six-month transition period. Therefore, you aren't required to submit the new form until Sept. 1.

For examples of when you might need to use the new ABN, see "Increase Your ABN Know-How With These 5 Sample Scenarios" on the next page.

Although CMS changed the ABN form, many of the previous ABN "best practices" remain the same. Remember these three important ABN facts to avoid services and procedures you can't collect on.

Tip 1: The ABN is still one of your most important documents because Medicare requires an ABN when there is a chance of denial due to a lack of medical necessity. If you discover that Medicare won't pay for a patient's upcoming procedure and the patient still wants you to perform the service, the ABN lets the patient know that he may be responsible for paying the noncovered portion.

ABNs help patients decide whether they want to proceed with a service even though they might have to pay for it. A signed ABN ensures that the physician will receive payment directly from the patient if Medicare refuses to pay. 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 at the time of service; otherwise the form is not valid," Hawes says. "When the claim is denied without an ABN, Medicare will not allow you to be reimbursed for the service or collect money from the patient."

Tip 2: You must explain the ABN to the patient. ABNs help the patient understand his options. Once you have discussed the ABN with the patient, he can: 1) sign the ABN and assume financial responsibility for the procedure noted on the ABN; 2) cancel the procedure; or 3) reschedule the procedure or service for a future date when he can afford it, or when Medicare may cover the procedure.

Tip 3: You should append modifiers to explain ABN status to your carrier. When you expect Medicare to deny all or part of a service, you should attach the correct modifier to the service code so Medicare's explanation of benefits (EOB) will properly outline when the patient has to pay. Use the following descriptions to guide your modifier choice:

- Modifier GA (Waiver of liability statement on file) applies "when the service provider believes the service is not covered and the office has a signed ABN on file," says Dena Rumisek, biller with Grand River Gastroenterology PC, in Grand Rapids, Mich. This might include tests ordered without a payable diagnosis code or those ordered more frequently than covered.

- 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) applies when Medicare statutorily excludes the service and you-re using the ABN as you would have used the NEMB in the past.

- Modifier GZ (Item or service expected to be denied as not reasonable and necessary) means that you didn't issue an ABN when you probably should have, and you cannot bill the patient when Medicare denies the service.

Read more: For more on the new ABN form, visit http://www.cms.hhs.gov/BNI/02_ABNGABNL.asp.