What Is an ABN Form and When Do You Need One?

An Advance Beneficiary Notice of Noncoverage (ABN), officially Form CMS-R-131, is a crucial communication tool in healthcare for individuals enrolled in Original Medicare. Healthcare providers issue this notice to inform patients about services or items Medicare may not cover. Its primary purpose is to ensure patients are aware of potential financial responsibility before receiving care, enabling informed treatment decisions.

What is an ABN Form

An ABN is a standardized form used by healthcare providers, including doctors, hospitals, laboratories, and suppliers. It is given to patients with Original Medicare when the provider believes Medicare may not pay for a specific service or item. The ABN’s central function is to transfer potential financial liability from the provider to the patient if Medicare denies coverage.

The form clearly outlines the service or item in question, explains the reason Medicare might not cover it, and provides an estimated cost. Reasons for potential non-coverage are explained, such as the service not being medically necessary or exceeding frequency limits. This ensures transparency regarding potential out-of-pocket expenses, enabling patients to understand their financial obligations before proceeding with care.

When You Might Receive an ABN

Healthcare providers are required to issue an ABN before providing services or items if they anticipate Medicare will deny payment. This notice is given when the service might not be medically necessary under Medicare guidelines, such as those outlined in Section 1862 of the Social Security Act. Examples include experimental services or those exceeding Medicare’s frequency limits.

An ABN is also used when a generally covered service does not meet Medicare’s specific criteria, such as certain types of custodial care. It is important to understand that an ABN is not used for services Medicare never covers, like routine dental care or cosmetic surgery. Providers must have a reasonable expectation of non-coverage for an ABN to be issued, ensuring it is not given routinely.

Your Options When Faced with an ABN

When presented with an ABN, a patient has three distinct options regarding financial responsibility and appeal rights. The patient must choose one option and sign the form, acknowledging their decision. Providers cannot influence the patient’s choice.

The patient receives the service and agrees to pay if Medicare does not. The provider submits a claim to Medicare for an official decision. This option preserves the patient’s right to appeal Medicare’s decision if the claim is denied.

The patient chooses to receive the service and pay out-of-pocket, without requiring a claim submission to Medicare. Since no claim is filed, the patient forfeits any appeal rights regarding Medicare coverage. Financial responsibility rests entirely with the patient from the outset.

The patient does not want to receive the service or item. By selecting this option, the patient avoids financial liability, and no claim is submitted to Medicare.

After Making Your Decision

The subsequent steps depend on the chosen option. If Option 1 was selected, the provider proceeds with the service and submits a claim to Medicare. If Medicare denies payment, the patient receives a Medicare Summary Notice (MSN) detailing the denial. The patient then retains the right to appeal Medicare’s decision, initiating an appeals process.

If Option 2 was chosen, the service is provided, and the patient is directly responsible for payment. No claim is submitted to Medicare, so there are no formal appeal rights through the Medicare system.

If Option 3 was chosen, the service is not rendered, and the patient incurs no financial obligation. The ABN itself is not an official denial of coverage; it serves as a notice of potential non-coverage. A formal decision only occurs after Medicare processes a claim.