Otolaryngology Coding Alert

Use medical necessity and denial history as a gauge when issuing ABNs.

Depending your degree of involvement in your practice’s administrative process, you may or may not be aware of the role advance beneficiary notices of noncoverage (ABN) play.

Definition: An ABN is a provider-issued document given to Medicare patients when the provider suspects that there is a chance that Medicare may deny a particular item or service. While the reasoning may vary, providers will issue the vast majority of ABNs on the basis that the item or procedure is commonly denied due to lack of medical necessity. “A traditional ABN is for Medicare patients only,” states Jennifer M. Connell, CPC, CENTC, CPCO, CPMA, CPPM, CPC-P, CPB, CPC-I, CEMA, Owner of E2E Health Solutions in Victoria, Texas. “However, many payers have adopted their own ABN forms for providers to issue in suspected non-coverage scenarios,” Connell explains.

ABN Puts Financial Burden on Patient

When a patient signs an ABN, they are agreeing to pay the provider for a particular service if and when Medicare denies it. The issue of an ABN does not necessarily mean that the service will be denied; it’s more of a precautionary measure taken by the provider in case the payer does deny the service.

As you will discover, there are numerous factors to take into consideration when you or your provider find yourself in a scenario in which issuing an ABN is justified.

Know When to Issue an ABN

Only under the appropriate circumstances should a practice consider issuing an ABN to a Medicare patient. According CMS, an ABN must be issued when you believe Medicare will deny a service that they traditionally pay for due to a lack of medical necessity. Additionally, your practice should issue an ABN for a particular service if:

• “It is not considered reasonable and necessary under Medicare Program standards;
• “The care is considered custodial;
• “Outpatient therapy services are in excess of therapy cap amounts and do not qualify for a therapy cap exception.”

Note any Triggering Events

Medicare outlines three “triggering” events in which you or your provider should consider issuing an ABN, with the initiation of a new service being the most common scenario. For all new patient services, it’s the provider’s responsibility to assess a given service to determine whether or not it is reasonable and/or necessary under Medicare guidelines.

Another scenario in which you should consider an ABN is in the case of reductions. A reduction of care consists of a decrease (in frequency or duration) of a particular service due to lack of medical necessity, as deemed by the payer. If the patient insists that the particular service still occurs at the same frequency as before, you should issue an ABN to the patient.

Finally, providers need to consider the use of an ABN in the case of a termination of care. If a beneficiary would like to continue receiving care for a terminated service, the patient would likely be required to fill out an ABN due to a suspected denial for the service.

Remember Medical Necessity Definition

Knowing what qualifies as a medically reasonable or necessary service is half the battle when it comes to ABNs. According to CMS, you should refer to this set of criteria when determining which services you should and should not consider medically necessary:

• “Experimental and investigational or considered ‘research only’;
• “Not indicated for diagnosis and/or treatment in this case;
• “Not considered safe and effective; or
• “More than the number of services Medicare allows in a specific period for the corresponding diagnosis.”

Example: Some insurance carriers, including Medicare, do not currently pay for certain allergy treatments. Specifically, if a patient opts to receive sublingual immunotherapy (SLIT) drops, they may receive a voluntary ABN explaining Medicare’s noncoverage policy for this treatment.

Keep an eye out for next month’s issue of Otolaryngology Coding Alert in which we will answer some of the most common frequently asked questions (FAQs) about the ABN process.