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New CMS advance notice mandates pose risk
The Centers for Medicare & Medicaid Services (CMS) is warning providers that they must use new Advance Beneficiary Notice (ABN) forms in connection with claims submitted for reimbursement under Medicare Part B. The use of the old ABNs or modified ABNs may not be effective to protect the providers from financial liability, warns Mary Ellen Allen, a health care attorney with Foley and Lardner in Los Angeles.
According to Allen, failure to comply with the Medicare rules concerning the use and execution of an ABN creates exposure to numerous risks, including financial liability, and even allegations of fraud and abuse or violation of other Medicare provisions.
An ABN is a written notice given by providers to Medicare beneficiaries before services or items are furnished, notifying beneficiaries that it is likely Medicare will deny payment for that specific service or item, and the reason for the expected denial. The ABN informs the beneficiary that they will be personally and fully responsible for payment if (as expected) Medicare denies payment.
There are two new ABN forms. One form (CMS-R-131-G) is the "general-use" ABN. The other, form (CMS-R-131-L) is designed for use with laboratory tests, including physician-ordered laboratory tests. Laboratories also may use the general ABN form.
Allen says the ABN must identify the specific service or item for which denial is expected and clearly state the reason a Medicare denial is expected. The reason for expected denial may be customized to list the most frequent reasons for denial, she adds, such as if Medicare does not pay for this item or service for a specific condition.
Listing multiple reasons which apply under different circumstances, however, without indicating which reasons apply in the beneficiary’s particular case, may render the ABN defective, she cautions.
According to Allen, the CMS guidance highlights several risk areas in implementing the new ABNs, including routine use of ABNs, generic ABNs, and blanket ABNs. "Routine" use of ABNs means providing ABNs to beneficiaries where there is no specific reason to expect that the item or service will be denied by Medicare. "Generic" ABNs are ABNs that simply indicate that Medicare denial of payment is possible, or that one never knows whether Medicare will pay or not. "Blanket" ABNs are ABNs that are given for all items or services.
"As a general rule, routinely given ABNs, generic ABNs, and blanket ABNs are considered to be defective notices and provide no protection from liability," she says.
Copies of the approved forms are available in PDF format, at http://cms.hhs.gov/medicare/bni.