Q&A: What to expect from an Advance Beneficiary Notice of Noncoverage

Q: As a case manager, what do I need to know about advance beneficiary notices?

A: An advance beneficiary notice of noncoverage (ABN) (Form CMS-R-131) is a written notice given to a patient with traditional Medicare when it is believed a service will not be covered by Medicare Part B, which may make the patient liable for the cost of the service. It is not a denial of coverage of services, and a claim may still be filed for the services. The ABN should list the service in question, its estimated cost, and the reason why Medicare may not pay for the service. The patient can then make an informed decision whether he or she wishes to bear the cost of services by continuing with the plan of care. The patient signs and dates the ABN, indicating he or she has read and understood it, at which time one of the following is likely to happen:

• The patient chooses the service in question and may be asked to pay for the cost of the item or service upon admission to the hospital. A bill is submitted to Medicare and the patient can appeal if payment for the service is denied.
• The patient chooses the service but does not want Medicare to be billed. He or she may be asked to pay for the service right away. The patient does not have appeal rights since Medicare is not billed.
• The patient declines the item or service in question; no claim is submitted to Medicare and the patient has no appeal rights.

Some hospitals give this notice to patients who insist upon admission although it appears unlikely that the hospital stay will be covered under Medicare. After reading the ABN form, the patient will sometimes allow the case manager to make an alternate plan rather than choose hospital admission. It is also useful in situations when one hospitalist might order an admission status only to have the next hospitalist change the patient’s admission status. Similarly, it is not unusual for the original hospitalist to consult with a colleague, decide the admission status was wrong, and change the order him- or herself.

For more information, see Case Management Patient Communication Toolkit.

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