Putting ABNs to Work

May 1, 2003

You can't just copy advance beneficiary ntocies (ABNs) and hand them out to every Medicare patient. Careful planning is essential for compliance.

You can't just copy advance beneficiary ntocies (ABNs) and hand them out to every Medicare patient. Careful planning is essential for compliance.

First, understand that there are two ABNs -- one for general use and one for laboratory services. Download both from the Tools section of our Web site at www.PhysiciansPractice.com. Make at least 100 copies of each for every practitioner in your practice to start. This should last at least a month, if not longer; but be sure to watch the supply so that you don't have to disrupt your operations to stop and copy. 

After reading the section, "When to Provide an ABN" in "all About ABNs" on this site, take a copy of a billing report that includes all CPT codes billed, by volume of code, on behalf of Medicare beneficiaries. (Not all of these elements are necessary if they aren't available on your billing system, but it's easier to develop your processes by having all three.)

Scroll through the report and identify the services that (1) are denied by Medicare as "not reasonable and necessary" and (2) are exclusions from Medicare benefits. Medicare specifically states that an ABN should be given if you "have a genuine reason to expect that Medicare will deny payment, based on other Medicare denials, local medical review policies (LMRPs), and local standards of medical practice on the basis of medical necessity." 

The services that you've identified as exclusions from Medicare benefits do not require an ABN; however, it is best to share this information with your staff to reduce confusion when they attempt to identify exactly when an ABN is needed, as well as to respond to patients' questions.  Make sure that your billing manager or the billing staff member in charge of Medicare is present at this critical meeting to assist in identifying these services.

Road map to implementation

Based on the services you've identified above, make a "road map" for your practice. Make sure that your front-office staff, nurses, and other practitioners understand your instructions; that is, don't use "Medicare language" or "legalese." Note that some services may need an ABN at times, and others not at all (such as those that are Medicare benefits, but may not meet coverage requirements), so your road map should contain explanations and examples, not just the codes. 

Put "ABN implementation" on your staff meeting agenda (and review separately with your practitioners, if they don't attend). Hand out the ABN form, review the steps below with everyone, offering examples at each step.

step 1: CMS (Transmittal AB-02-114) states that the ABN should take place before a procedure is initiated and before physical preparation of the patient, (e.g., disrobing, placement in or attachment of diagnostic or treatment equipment). Decide who and when will be responsible for notifying the practitioner of the need for an ABN.

step 2: When the designated individual (e.g., a nurse) discovers the necessity for an ABN, he should pull a form from a predetermined folder or bin where the copies are kept. The ABN should then be attached to the chart or medical history notes with any relevant information that the nurse can knowingly complete.

step 3: When the practitioner begins the encounter, he should review the ABN with the patient (if the nurse hasn't done so already), much like a consent form, and request that the patient (or guardian) complete the form.  If treatment that would require an ABN is determined after the encounter has begun, CMS recognizes that introduction of the ABN at this time is not prohibited, per their instruction under "Step 1," above.

step 4: Attach the signed ABN form to the charge ticket where the service is marked. If the patient has refused to sign the form, that should be noted by the practitioner. 

step 5: Key the CPT code(s) for which the ABN was signed (or witnessed that the patient refused to sign) with a "-GA" modifier. This creates a "demand bill" to let Medicare know that you've obtained the ABN, and they will either pay for the service or verify your ability to balance-bill the patient. If you should have obtained an ABN (and billed the CPT with a -GA modifier) and didn't, Medicare will not allow you to hold their beneficiary responsible; in essence, you will have provided this service for free.

Your billing staff will also need to be aware of two other, related modifiers and when to use them: -GY is a new modifier to be appended to the service code when the practitioner needs to indicate that the service is not part of the Medicare benefit, and will not be reimbursed by the program. Once the claim is denied, as expected, the patient is responsible for all charges, either personally or through other insurance.

-GZ is a new modifier to be appended to the service code for services that may not be reasonable or necessary, and an ABN has not been obtained from the patient. Once the claim is denied, as expected, these services will need to be written off, as an ABN was required but not obtained.


Although it seems like an easy way to solve the issue, make sure that your staff recognizes that ABNs cannot simply be distributed and signed by all Medicare patients. The forms must be given to patients only when they are needed; the only exceptions are services or tests provided over an extended period of time, with no change to the order. 

Your staff will receive questions about ABNs from your Medicare patients. That's why it's important to be as comprehensive in the training and orientation as possible. Meet with your billing staff, including the staff keying in the charges, to review the use of the new modifier, where the signed ABNs will be kept, and what to do in circumstances when the service needed an ABN and it wasn't obtained. For the latter, you'll need to identify a write-off code in your billing system, as these charges must be written off. 

Tracking write-offs through your billing system from the lack of ABNs will allow you to monitor the success of your implementation.  Write-offs should be minimal; if they are not, observe the details of the claim (CPT code, practitioner, date of service, etc.) to pinpoint the best method of retraining your staff and practitioners.

Elizabeth Woodcock, director of knowledge management for Physicians Practice, can be reached at
ewoodcock@physicianspractice.com.

This article originally appeared in the May 2003 issue of Physicians Practice.