Pathology/Lab Coding Alert

If your payer denies coverage because you can't show medical necessity for a lab test, you have to eat the cost -- unless you have a signed advance beneficiary notice (ABN)

But an ABN wouldn't help you with statutorily non-covered services, such as many screening tests -- until now. Get familiar with CMS- new universal ABN and learn how it can help you get paid and avoid lab-test write offs.

Before CMS unveiled its universal ABN in March, providers had to choose from several forms. Now the new form 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. 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.

The NEMB's previous purpose: Remember that earlier ABNs were only for procedures that Medicare might not cover due to lack of medical necessity but didn't apply to procedures that Medicare statutorily excluded from benefits. For instance, except for certain specific screening benefits, Medicare won't cover screening lab tests ordered in the absence of signs or symptoms of disease.

Contrast ABN purpose: For both the previous and current versions, you should use an ABN when the patient's insurer won't cover a test because you cannot prove medical necessity, says Lena Robins, JD, senior counsel at Foley and Lardner LLP. For instance, when a Medicare carrier subjects a lab test to frequency limits, you will need a signed ABN if the physician orders the test at a shorter interval.

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. That means you aren't required to submit the new form until Sept. 1.

The new ABN (form CMS-R-131) includes Blank (F) that requires you to enter a cost estimate for the service(s) you name in the form. "The revised ABN will not be considered valid absent a good-faith attempt to estimate cost," says CMS instruction.

You can download the form and the instructions from http://www.cms.hhs.gov/BNI/02_ABNGABNL.asp.

Although the ABN form has changed, many of the previous ABN "best practices" remain the same. The following is a quick look at three important ABN facts:

1. The ABN is one of your best tools to ensure payment when a lab test isn't covered. If you discover that a patient's ordered lab work is not payable by Medicare but the patient still wants you to perform the service, the ABN will let the patient know that she may be responsible to pay for the noncovered work.

A signed ABN ensures that your lab can bill the patient directly 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.

Pitfall: The patient has to sign the ABN form prior to service, otherwise the form is not valid, Hawes says.

2. Explain the ABN to the patient. ABNs help the patient understand the options. Once you have completed the ABN and discussed it with the patient, he can: 1) sign the ABN and assume financial responsibility for the procedure in question; 2) cancel the test; or 3) reschedule the test for a future date when he can afford it or when Medicare may cover the procedure.

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

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

For example: One year after her last Pap test, the physician orders a screening Pap test for a Medicare patient (such as G0143, Screening cytopathology, cervical or vaginal [any reporting system], collected in preservative fluid, automated thin layer preparation, with manual screening and rescreening by cytotechnologist under physician supervision). But the medical record does not indicate that the patient is high-risk or is of childbearing age with an abnormal Pap test within the past three years. That means Medicare will only cover the test at 24-month intervals.

Solution: You should have the patient sign an ABN and report G0143-GA to indicate that you have the document on file.

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 excludes the service, and you are using the new ABN as you would have used the NEMB form 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.