Pathology/Lab Coding Alert

Use ABNs to encourage patient payment

Just because an ordered lab test isn't covered doesn't mean your lab has to eat the cost. You should use an advance beneficiary notice (ABN) and coding modifiers GA, GY and GZ so that you - and your payers - can notify patients when they'll have to pay.

But if you aren't sure when to give patients an ABN, you aren't alone. "The regulations and covered diagnoses change all the time," making the ABN process difficult for labs and physicians alike, says Joan Adler, a consultant with Adler Advisory Services in Los Angeles.

Distinguish Reasons for Noncoverage

Medicare and some other payers require you to use code modifiers to indicate why a test is not covered. That way Medicare can correctly inform patients when and why they need to pay for a test. See "3 Modifiers Tell the Tale of ABN Status" in the previous article to help you select the proper modifier.

Lack of documented medical necessity is a prime reason labs must issue an ABN.
Example: A physician sends a blood specimen for an iron test (83540, Iron) to "rule out" iron-deficiency anemia. Because the physician does not provide signs, symptoms or a condition that indicates medical necessity, the lab should obtain a signed ABN before conducting the test.

Performing statutorily noncovered services, such as many screening tests, is another reason labs should issue an ABN.

Scenario: A physician orders a standard battery of blood tests (80050, General health panel) as part of a routine physical examination for a 70-year-old patient. Because this is a screening test that Medicare does not cover - by law - the lab should secure a signed ABN before performing the tests.

Avoid Patient Payment Surprises

Follow these three rules to enhance your ABN compliance and improve patient pay-up:

1. Use one ABN per event. "You cannot use a blanket ABN, because some diagnoses are covered while others are not," Adler says. You only use an ABN for non-covered services.

2. Be specific about why the service could be denied. You don't have to go into detail, but you should give a patient the reason that a test won't be covered, such as frequency limitations or a noncovered diagnosis.

3. Tell patients all of their options. Your patients may not realize they can go back to their physician to discuss alternatives to a noncovered test, says Janet Schroeter, a lab compliance specialist with the Vascular Diagnostics Lab at Fletcher Allen Health Care in Burlington, Vt.

And if patients refuse to sign the ABN, advise them to go back to their physician for a follow-up. Schroeter points out that physicians order tests because they are in the patient's best interest - better to find an alternative route of care than to forego care altogether.

The bottom line: Think of the ABN the same as any other contract, says Pat Zelenka, MT (ASCP), technical consultant with Avera Lab Network in Yankton, S.D. You have to disclose all the information - even the deal-breakers - before it's too late for your patients to make a different decision. That's the best way to ensure you'll get paid, even if insurance doesn't cover the lab test.

Note: You should use Medicare's official ABN for laboratories, which you can access on the Internet at www.cms.hhs.gov/medicare/bni/CMSR131L_June2002.pdf.