How the Medicare ABN Protects Patients and Saves Them Money

Medicare does not cover everything, and that could leave you with a lot of out-of-pocket expenses. That is when a Medicare Advanced Beneficiary Note of Non-coverage (ABN) Form CMS-R-131 can come in handy. This form is used for people on traditional Medicare (Part A and Part B) but not for people on Medicare Advantage plans (Part C). The ABN may help you win a Medicare appeal and avoid unnecessary billing. This is what every Medicare beneficiary needs to know.

How the Medicare ABN Works

The Medicare ABN is a form that your medical provider should ask you to sign whenever there is a question about Medicare coverage. If a service is never covered by Medicare, e.g., dentures, eyeglasses, or eyeglasses, an ABN is not appropriate. The form is indicated if Medicare might cover the service.

For example, your healthcare provider may want to perform a colonoscopy because you have a history for colon polyps, but Medicare may only allow the procedure every two years if you have what they consider to be high-risk polyps (adenomatous polyps). If you have a different type of polyp, it is possible the study would not be covered as often.

When this happens, your healthcare provider wants to make sure he is going to be paid, so he will have you sign the Medicare ABN. It is, in essence, a waiver of liability. By signing the form, you agree to accept financial responsibility for care if Medicare denies payment.

A Medicare ABN must follow certain rules. First and foremost, it must be legible. It must also list the specific service in question, its expected cost, and the reason Medicare may not cover the test. Think of it as informed consent for financial responsibility. Without this information, you would not be able to make an educated decision.

Each visit requires its own form. However, if more than one service is performed at that visit, they can be listed on the one form. To be valid, the Medicare ABN must be signed and dated before the service is completed.

Signing a Medicare ABN

You have an important choice to make. Signing the Medicare ABN puts you on the hook to make payments whether or not Medicare covers the service. That does not necessarily mean Medicare won't pay. Unfortunately, the only way to know for sure is to complete the test and submit a claim to Medicare.

If you decide you want the items and services, you should sign the ABN. Then, you and your medical provider have to decide if and who will submit a claim to Medicare. There should be an area on the form to designate this option. You essentially have three choices:

1. You sign the Medicare ABN and submit the claim to Medicare yourself.
2. You sign the Medicare ABN and your medical provider submits the claim to Medicare.
3. You sign the Medicare ABN, pay your medical provider for the service directly, and no one submits a claim to Medicare.

Not signing the form has its own consequences. Unless the care in question is for an emergency, the healthcare provider or facility can decline to provide the item, service, test, or procedure in question. Also, if an ABN is not signed, you cannot make an appeal to Medicare to cover it.

When You Are Liable to Pay with a Medicare ABN

At first glance, it may sound as if the Medicare ABN protects medical providers more than beneficiaries. After all, it is a tool to assure that they get paid. However, it is also a tool that can be used to protect you, the patient.

If a medical office or supplier fails to provide a Medicare ABN before providing an item or service, you will not be liable to pay if Medicare denies coverage. There are also a number of scenarios, however, where you will not be liable to pay for an item or service even if you did sign an ABN:

• The Medicare ABN is not legible.
• The Medicare ABN was signed after the item or service was provided.
• The Medicare ABN does not provide all the essential information on the form (name of service, cost of service, and the reason why Medicare may not cover the service).

When Screening Tests Turn Diagnostic

The Medicare ABN becomes especially important when a screening test becomes diagnostic. Generally speaking, screening tests are used to look for disease in someone who does not have symptoms while diagnostic tests are performed when someone has symptoms or otherwise has an abnormal finding.

Medicare covers certain preventive screening tests (e.g., colonoscopies, mammograms, and Pap smears) free of charge as long as they are ordered by a Medicare doctor that accepts assignment. Diagnostic tests, however, require a 20 percent coinsurance under Medicare Part B.

Let's use the example of a colonoscopy one more time. Screening colonoscopies are offered every 10 years for people at low risk for colon cancer but as often as every two years for people at high risk. If a colon polyp is found during the screening test, it needs to be removed and analyzed under a microscope to find out if it is cancerous or precancerous. Because the biopsy is performed in response to an abnormal finding, the entire colonoscopy procedure is now considered diagnostic, even though the person was asymptomatic to begin with and there was no knowledge of preexisting polyps.

Instead of receiving free care, a Medicare beneficiary would now face 20 percent charge of a test that could range from $1,000 to $7,000 depending on where they live in the country and who their healthcare provider is. Had this added cost not been addressed using a Medicare ABN, they would not have to pay for it.

Appealing a Medicare Bill

If Medicare denies coverage for certain items, tests, or procedures, you should first check to see if there was a billing error at the medical office. Changing the diagnostic or billing code can sometimes be enough to get coverage approved. Next, you should check to see if you signed a Medicare ABN. Contact your healthcare provider's office and ask for a copy. Make sure it is signed and dated before the service was provided.

If you did not sign an ABN, you are not liable to pay. If you did sign an ABN, you may need to file an appeal with Medicare to get coverage. You must file your appeal within 120 days of the date you received the notice of denial from Medicare. The process requires completion of a form, and you may also include any supporting documentation to strengthen your case. Hopefully, your appeal will be approved.

A Word From Verywell

Not everyone understands their rights but knowing how the Medicare ABN works can save you a lot of time and frustration. If you do not sign a Medicare ABN, you may not be liable to pay for care that Medicare denies. However, keep in mind that outside of an emergency, the medical doctor or facility could also refuse to provide that service. If you do sign an ABN, you always have the option for a Medicare appeal as long as a claim is submitted to Medicare. You need to ask yourself if the service is necessary and worth the potential added cost to you.