An Advance Beneficiary Notice (ABN) of non-coverage is a document that healthcare 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.
We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:
- Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
- Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
- Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
An ABN of non-coverage is a waiver of liability. It transfers the responsibility for payment of a healthcare service or item from Medicare to an individual.
Original Medicare pays for medically necessary services. Typically, Medicare Part A covers inpatient hospital services, and Part B covers outpatient medical services.
If a healthcare provider 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 (should the person continue to use or receive the non-covered service).
The exact advisory detail on an ABN will depend on the situation.
Types of ABN
Various healthcare 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)
- SNF-ABN
- Hospital Issued Notice of Non-Coverage (HINN)
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.
HINN
A hospital may issue a 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?
There are some items and services that Medicare usually excludes 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.
Those with Medicare Advantage plans also do not receive ABNs.
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 can ask that the provider 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.
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 service provider can send Medicare a bill for an official decision on the payment. Medicare will inform the person of the 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.
Medicare may issue different denial letters for Medicare Advantage 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 their provider 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 something that Medicare may not cover.
Although the ABN warns that Medicare may not pay for a service, if the person appeals, Medicare may still cover the claim.
If a doctor, hospital, or other healthcare provider thinks that Medicare may not cover an item or service that someone needs, they can issue an ABN.
The person must then pay out of pocket for the service, but they can request that Medicare covers 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.