Pathology/Lab Coding Alert

You have the form CMS-R-131-L Advance Beneficiary Notice (ABN) for labs but do you know how to use it? Aug. 31, 2002, is the deadline to begin using the new ABN, so run this lab diagnostic to be sure you're following the CMS instructions that go with it:

"Simply put, get a signed ABN when you expect Medicare to deny the claim," says Laurie Castillo, MA, CPC, CPC-H, CCS-P, member of the National Advisory Board of the American Academy of Professional Coders, and president of Physician Coding and Compliance Consulting, Manassas, Va. "This means you have to check national Medicare policy and LMRPs to see whether the ordered test is covered for the given ICD-9 diagnosis code ." Then if Medicare considers the test "not medically necessary," or if the test exceeds frequency limitations, get a signed ABN. As a courtesy to patients, you may also use the ABN for noncovered services such as screening tests.

Because a specimen may come to the lab without a payable ICD-9 diagnosis (assigned by the ordering physician) and without an ABN, labs may have to contact the patient to get the form signed before running the test. You may call for a verbal agreement, followed by a signature on a delivered, faxed or mailed ABN, Castillo says.

"Never have a patient sign a blank ABN," Castillo says. The form must include the name of the test that is likely to be denied (the CPT code is not satisfactory) and the reason. Also fill in the cost estimate on the form so the patient can make an informed choice about the service.

The patient or authorized representative must sign the form and select either option 1) Yes I want to receive these lab tests understanding that I may have to pay, or 2) No I don't want to receive these lab tests.

If the patient refuses to sign the ABN but still wants to have the test, the lab should "consider not furnishing the [test] unless the consequences (health and safety of the patient or civil liability in case of harm) are such that this is not an option," CMS says. Annotate the ABN explaining the circumstances and people involved and get a witness signature.

Don't ever use "blanket" ABNs: routinely asking all patients to sign the form for all services just in case Medicare doesn't pay.

"You can use either the lab ABN (CMS-R-131-L) or the general ABN (CMS-R-131-G), but most labs will find the 'L' version most useful because it is more specific," says Larry Small, MS, MT(ASCP), director, compliance and billing services for PCS Laboratory Service Group in Ann Arbor, Mich. The lab form provides three spaces for listing the test based on the expected reason for denial the test either 1) lacks medical necessity, 2) exceeds frequency limitations, or 3) is experimental.

Make no mistake: You must use one of these ABN forms. "Knowingly billing Medicare with no attempt to ensure a payable diagnosis could be construed as filing a false claim," Small says. Also, if Medicare denies the claim and you don't have a signed ABN, you can't bill the patient.

Altering the CMS forms (available on the Internet at http://www.cms.hhs.gov/medicare/bni/default.asp) may render the ABN "ineffective in protecting physicians and suppliers from liability," according to CMS instruction. "Except for the customizable section [three-column box area on CMS-R-131-L], use the new ABN as-is," Small advises.