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Billing Basics: Advance Your Revenue With These ABN Answers

3 processes to help you get paid for all services

You may know how to obtain an advance beneficiary notice (ABN) for noncovered services, but having that piece of paper doesn't ensure your facility's compensation. Streamline the steps between ABNs and money in the bank with these expert suggestions.
1. Know Who's Liable
In addition to understanding the regulations dictating how to get ABNs from patients, you need to know how these regulations translate into payments -
or don't.
Pitfall: Don't make the mistake of assuming that once a patient signs an ABN, you're going to get paid. Depending on the type of liability provision the patient falls under, the ABN may not mean anything other than notification of noncovered services. Make sure you're familiar with these two provisions:
Limitation on liability. This kind of provision applies to providers participating in Medicare, and requires only that you notify the beneficiary of noncoverage. "There does not have to be, in writing, an explicit agreement to pay," says Stacie Buck, RHIA, LHRM, president of Health Information Management Associates Inc. in North Palm Beach, Fla. So by signing the ABN, the patient is not agreeing to pay you for the service.
Refund requirements. This provision applies to providers not participating in Medicare, and requires you to provide not only notification of noncoverage but also a written agreement that the beneficiary will pay.
2. Lock In Necessity
Deciding what meets medical- necessity requirements for an ABN service isn't always easy. CMS defines medical necessity as "the determination of a service that is reasonable and necessary for the diagnosis of illness or injury, or treatment of a malformed body member."
And once the services meet that condition, you may still have to navigate through a maze of other regulatory hoops, such as Local Coverage Determinations (LCDs), and National Coverage Determinations (NCDs).
Use these steps to decide whether the service fits the insurer's rules on medical necessity:
Look at the physician's order or patient's prescription to find out whether that test or service has an NCD or LCD. If there are no limitations on coverage, the patient doesn't need an ABN, and you're in the clear.
If you find a relevant NCD or LCD and discover that the service or test does have limited coverage, review the signs or symptoms that prompted the physician to order the test, and decide whether the policy covers that indication, Buck says.
"If you find that [the service] does not meet the medical-necessity requirements, and the signs and symptoms or diagnosis is not on the [covered] list, then you should have the patient complete an ABN," [...]

- Published on 2005-06-20