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Advanced Beneficiary Notices, Why and When Needed

Written by: Mediware on Wednesday, June 3, 2015 Posted in: Outpatient Rehab

Not just recently but for some time in the Original Medicare program, notification of patient payment liability has always been encouraged through the use of something called the Advanced Beneficiary Notice, or ABN. As it states, in advance of the beneficiary receiving services, a notice is provided to the individual with information for why the provider believes Medicare may not pay for the service.

CMS literature states that “ABN issuance allows the provider to charge the beneficiary if Medicare doesn’t pay. If the ABN isn’t issued when it is required, and Medicare doesn’t pay the claim, the provider/supplier will be liable for the charges.”

All of these conditions sound like good reason to train staff on the appropriate use of an ABN. At a time in healthcare when payments have been trimmed through Multiple Procedure Payment Reduction (MPPR), sequestration, quality monitoring reduction formulas and the like, it makes perfect business sense for each provider to follow required steps to achieve payment for services, particularly in the Medicare part B program.

When is an ABN required with the exceptions process to therapy caps in place until 12/30/2017.  This FAQ published by CMS is an extremely helpful 4 page summary for discussion with staff..

Teach staff to issue an ABN when:

  • You believe Medicare may not pay an item or service;
  • When normally the item/service is covered but, under present conditions lacks, ‘reasonable & necessary’ conditions.’

Since I hate relying on a definition with the condition statement as part of the description, I would define those further to include:

a.  the beneficiary’s condition requires treatment of a level or complexity and sophistication that can only be safely and effectively performed by a Medicare certified (defined) therapist;

b. the treatment program outlined is expected to significantly improve the beneficiary’s condition within a reasonable and predictable period of time or prevent the worsening of functions that affect self-care or the dependence on others

c. the amount, frequency, and duration of services are reasonable by professionally recognized standards of practice for therapy services (also consider Local and National Coverage Determination Policies).

Medicare defines “reasonable and necessary” as services that are for the diagnosis or treatment of an illness or injury or to improve the functioning of a malformed body member when NOT excluded under another provision of the Medicare Program.

There are volumes of other provisions published at, so I will make this easy and provide you a link to an extremely beneficial guide booklet that CMS published in August 2014 specifically about the use of ABN’s.

The title is simply,  “Advanced Beneficiary Notice of Noncoverage’ (ABN)


Staff must be well aware of the picture that is painted in the context of their notes. After all, any determination of medically necessary care will come down to a manual chart review, and there should be no doubt that the conditions listed above exist and are being met through the treatment plan professionally provided.

If instead the auditor sees:

  • Non-therapeutic, routine or repetitive procedures that do not require the skilled oversight of a licensed therapist
  • General exercises are employed without specialty rationale for need and or are generic for strengthening/endurance without functional purpose within the plan
  • Services are considered experimental
  • Volume of services provided extend beyond LCD/NCD lack of published effectiveness.
  • Patient’s functional level is greater than reported and or key functional goal met, thereby rendering additional therapy as “not reasonable” or “necessary”
  • Overall documentation beyond original plan for listed concrete deficit and required skilled care to meet plausible outcomes to enable non-dependence or reduced pain.

Effectiveness and efficiency are key elements of healthcare moving forward. Many patients will have significant impairment requiring greater than a capped level of therapy. When that occurs, utilize the “KX” modifier to signal medically necessary care is required, and be certain your documentation supports the facts. If you lack the ability to continuously bridge the gap to demonstrate effective treatment toward long-term goals, self-audits and discussions around which patients could have been candidates for ABN’s based on honest facts should be in your game plan.

Find a few denials based on Medical Necessity, and use those charts to educate staff as to WHEN the pointers discussed above were apparent. At what time did documentation fail the patient’s need for skilled care? These ideals must be clearly understood, so that your staff members decrease liability for you and your patients. Be honest, be concrete and follow the rules! Asking yourself about the need for an ABN keeps documentation on task and the bottom line solvent.

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