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Practice Management Alert

Use ABNs to Educate Improve Your Collections

Published on Wed May 01, 2002

Using advance beneficiary notices (ABNs) properly with Medicare patients can mean the difference between collecting from patients on items Medicare denies as medically unnecessary and having to write off the charge. ABNs are essential to educate patients on their financial responsibilities and to ensure that your practice can recoup its entitled revenues.

2002 Changes Affect ABN Usage

CMS introduced standardized forms for the ABN in 2001. Forms CMS-R-131-G for general use and CMS-R-131-L for laboratory tests, with Medicare Carriers Manual (MCM) instructions, are to be fully implemented in September 2002 after the former model, HCFA-R-131, expires on Aug. 31, 2002.

The new forms, written in English and Spanish, and the implementing carrier instructions were submitted to the Office of Management and Budget (OMB) in January 2002. You should note the following changes that impact your billing and collections department:

  • ABN-X for exclusions is abandoned. CMS had proposed an ABN for services excluded from Medicare coverage. Practices were to use Form CMS-R-131-X when they knew for a fact that Medicare does not cover the services they planned to render. The ABN-X was to remind patients of their financial responsibility for noncovered Medicare services, says Kim Pollock, RN, MBA, a consultant with Karen Zupko & Associates in Chicago. Because of questions and complaints about the proposed form, CMS withdrew it from its final submission to OMB and its instructions to carriers, citing it as "an unnecessary complication of the ABN process."

    Despite CMS' withdrawal of the form, the premise is a good one. "For exclusions, such as routine physicals, hearing aids, and eyeglasses for which Medicare never pays, most practices don't have a problem with patients refusing to pay for the services. Billing staff generally know what's excluded from coverage and collect cash up front," Pollock explains. "But, for a patient who pays on a budget plan, you should have the patient sign some type of practice-developed financial agreement that serves as a binding contract for the services." If you ever have to take the patient to court to collect payment, the ABN will serve as evidence.
  • ABN for exclusions not required. CMS says ABNs are not required for Medicare exclusions. Practices should not use the forms for this purpose because they contain language asking for a claim to be submitted to Medicare. Generally, no claims should be filed for services that are excluded from Medicare coverage. The carrier instructions state: "In situations in which ABNs are not required, physicians and suppliers are neither required nor prohibited from voluntarily giving some sort of notice to beneficiaries anyway, as a prudent customer service."
  • Generic and blanket ABNs are prohibited. The new forms require the physician to:

    1. state what items or services Medicare may not cover

    2. describe the items and services in enough detail that the patient can understand why Medicare payment may be denied.

    You should not give an ABN to beneficiaries if there is no specific, identifiable reason to believe Medicare will not pay, according to the carrier instructions. And, giving a beneficiary a blank ABN to sign and then filling in the form later is prohibited.

    To meet these requirements, many practices have the appointment scheduler determine the purpose of the visit when the appointment is made. "Before the visit," advises Claire Sheehan, CMM, CPC, billing manager of North Dover Ob/Gyn in Toms River, N.J., "have the ABN prepared for what you know patients are coming in for, and have it ready for them to sign when they get there." If the doctors order services during the visit or want to perform a procedure, they must understand what procedures and services may require an ABN. "You've got to educate the doctor first" so a system can be put in place to get the ABN signed. For example, when a blood test is ordered, the lab technician presents the ABN and explains it before taking the test sample. Help your physicians keep track of common procedures they perform that require an ABN by creating and posting a list.

    If the physician indicates on the form that he anticipates that Medicare will deny the service as "not medically necessary," you need to explain that to the patient. Inform him or her that just because there's no Medicare benefit for it, doesn't mean the patient can't or shouldn't have the service, Sheehan says.

  • With a signed ABN, you may collect the patient balance up front. Billing managers seem to be uncertain whether physicians should collect at the time a noncovered service is provided. Some collectors think the claim should be sent to Medicare and payment collected from the patient afterward. The new ABN instructions clear that up, Pollock says. The carrier instructions state that when an ABN is properly signed, "The physician or supplier may collect at the time of service and refund the beneficiary that amount if Medicare does pay, or he/she/it may wait to collect from the beneficiary until Medicare denies payment, unless prohibited from collecting in advance Medicare payment determination by state or local law." Before collecting from Medicare patients up front, ask your practice attorney if any state or local laws apply.
  • With a signed ABN, you may collect your full fee from the patient. The carrier instructions state: "Medicare does not limit the amount which the physician or supplier, participating or nonparticipating, may collect from the beneficiary in such a situation. Medicare-charge limits do not apply to either assigned or unassigned claims when collection from the beneficiary is permitted on the basis of an ABN. A beneficiary's agreement to 'be personally and fully responsible for payment' means that the beneficiary agrees to pay out-of-pocket, or through any other insurance that the beneficiary may have."

    Know Medicare Regulations

    You can obtain information on Medicare regulations from your physician's specialty society, by attending a specialty coding and reimbursement course, or by examining the MCM for services your practice provides. Reading your carrier's publications and visiting its Web site, or the CMS Web site, will also help.

    Note: The new Medicare ABNs, copies of the forms, and the instructions to carriers are available on the Internet at www.hcfa.gov/regs/prdact95.htm. Scroll down to "February 26, 2002 Information Collection Requirements in CMS-R-131,Supporting Statements forPart B Advance Beneficiary Notice and Supporting Regulations in 42 CFR 411.404 and 411.408/CMS-R-131"and click onCMSR131.ZIP 260K. This will download a file to your computer. You will need the software program WinZip, or another program that opens ZIP files, to open the file and see the documents. To obtain copies of the CMS-R-131-G and CMS-R-131-L forms only, and the current HCFA-R-131 model language, visit www.hcfa.gov/forms/default.asp and click on the corresponding form. You will need Adobe Acrobat Reader software to open the file and view it. The program is available at no charge from www.codinginstitute.com. $ $ $

     

     

     

     

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