An Advance Beneficiary Notice of Noncoverage (ABN) is a document that providers can give to people with Original Medicare to tell them that their plan does not cover an item or service.
Medicare covers most, but not all, medical items and services. If a doctor or medical supplier thinks that Medicare will deny an aspect of care, they will provide an ABN.
This article discusses ABNs, including what they advise, their advantages, and accepting financial responsibility for items and services that Medicare does not cover.
Glossary of Medicare terms
- Out-of-pocket cost: This is the amount a person must pay for care when Medicare does not pay the total amount or offer coverage. Costs can include deductibles, coinsurance, copayments, and premiums.
- Premium: This is the amount of money someone pays each month for Medicare coverage.
- Deductible: This is an annual amount a person must spend out of pocket within a certain period before Medicare starts to fund their treatments.
- Coinsurance: This is the percentage of treatment costs that a person must self-fund. For Medicare Part B, coinsurance is 20%.
- Copayment: This is a fixed dollar amount a person with insurance pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
An ABN is a waiver of liability. It transfers the responsibility for payment of a healthcare service or item from Medicare to an individual.
Original Medicare (parts A and B) pays for medically necessary services. Typically, Medicare Part A covers inpatient hospital services, while Part B covers outpatient medical services.
If a healthcare professional thinks that Medicare will not cover the visit or item, they will issue an ABN, which is government Form CMS-R-131.
The ABN details the reason that Medicare may not pay for an item or service and an estimated cost if the person continues to use or receive the service that is not covered.
The exact advisory detail on an ABN will depend on the situation.
Types of ABN
Various providers may issue an ABN, depending on the situation. For example, notifiers may be:
- hospitals, hospice providers, or skilled nursing facilities (SNFs)
- physicians, outpatient providers, practitioners, or suppliers
- certain home health agencies
Types of ABN include:
- Fee-for-Service ABN (FFS-ABN): A person may receive an FFS-ABN when Medicare Part B does not cover ambulance services, laboratory tests, medical supplies, or home health aide services.
- SNF-ABN: An SNF may issue an SNF-ABN if a person is approaching the number of days of custodial care that Medicare covers.
- Hospital Issued Notice of Non-Coverage (HINN): A hospital may issue an HINN if they know that Medicare Part A will not cover some or all of an individual’s inpatient stay.
When might a person not receive an ABN?
Medicare usually excludes some items and services from coverage. These include dentures, hearing aids, and cosmetic procedures.
If a person uses or receives excluded services, a provider will not provide an ABN.
People with Medicare Advantage (Part C) plans also do not receive ABNs.
Medicare resources
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A person who receives the ABN must complete it and sign the bottom of the form.
The form allows the person to choose one of the following three options:
| Option 1 | The individual still wishes to receive the item or service that Medicare will not cover. They may have to pay out of pocket at that time, but they can ask that the health professional or facility also submit the claim to Medicare. If Medicare denies payment, the individual can appeal. If successful, Medicare will refund them. |
| Option 2 | The individual still wants to receive the item or service and accepts that they are responsible for the payment. Medicare will not receive a bill, and the individual cannot appeal. |
| Option 3 | The individual chooses not to use or receive the item or service. |
The individual must sign the form once they have chosen their preferred option.
When they do so, they are agreeing to pay any fees for the uncovered services or items, and they understand that Medicare may not refund the payment.
People have the right to an expedited appeal if they believe that the services they get will end before the likely completion of the appeal process. Such services may come from a:
- hospital
- hospice
- skilled nursing facility
- outpatient rehabilitation facility
- home health agency
A healthcare professional or facility will give a person a written notice before the service ends. The notice includes instructions on how to ask for a fast appeal.
In instances when an individual does not receive the notice, they may request it.
When a person receives an ABN, they must decide if they want to continue to receive the care. If they opt to continue, they must accept the financial responsibility for the service — at least initially.
The healthcare professional or facility providing the service can send Medicare a bill for an official decision on the payment.
Medicare will inform a person of its decision in the quarterly Medicare Summary Notice (MSN) they receive through the mail. The person can file an appeal to Medicare if they disagree with the decision.
To appeal, they must complete a Redetermination Request Form within 120 days of receiving the MSN. The MSN advises where to send this form.
The form requires the following information:
- the person’s name and address
- the Medicare number on their Medicare card
- the items or services they wish to appeal
- why they are appealing the coverage
- any other relevant information
Medicare should send a decision within 60 days of receiving the request.
An ABN is a specific type of denial letter that applies to individuals with Original Medicare (parts A and B).
Medicare may issue different denial letters for Medicare Advantage (Part C) plans or Medicare Part D.
For example, if a person has a Medicare Advantage plan, they may receive a Notice of Denial of Medical Coverage (Integrated Denial Notice) if they visited a doctor outside of the plan’s health network.
On the other hand, those with Medicare Part D may receive a denial letter if the plan’s formulary does not cover their prescription medication.
Receiving an ABN allows a person to decide if they want to use or receive a service or item and pay the cost out of pocket. This prevents unexpected bills for services or items that Medicare may not cover.
Although the ABN warns that Medicare may not pay for a service, Medicare may still cover the claim if the person appeals.
If a doctor, hospital, or other health professional or facility thinks that Medicare may not cover an item or service that a person needs, they can issue an ABN.
The person must then pay out of pocket for the service, but they can request that Medicare cover the claim.
If Medicare denies the claim, a person can appeal. Medicare may still refuse to pay the claim, but it is possible that they might approve the coverage and arrange a refund.
ABNs prevent people from receiving potentially costly treatments that Medicare will not cover.