Compliance Alert – New ABN form for Medicare

An Advance Beneficiary Notice of Noncoverage, or ABN, is a liability waiver form that is given when a healthcare provider or medical supply company thinks or knows Medicare will not cover something. 

Not every ABN is the same, some are skilled nursing facilities ABNs , hospital issued notice of noncoverage, and fee-for-service ABNs. It will explain:

  1. The goods or services that Medicare will not cover
  2. The estimated cost of each item and service that Medicare will not cover

An ABN is not required for items or services that Medicare never covers. Some examples would include:

  • Long-term care (also called custodial care )
  • Most dental care
  • Eye exams related to prescribing glasses
  • Dentures
  • Cosmetic surgery  
  • Acupuncture  
  • Hearing aids and exams for fitting them
  • Routine foot care

Skilled nursing facilities issue an ABN if there is a possibility that the care in the facility or a long-term stay may not be covered by Medicare Part A. It may be issued if the stay is classified as custodial care, which refers to assistance with activities of daily living (bathing, assistance with meals, dressing). 

Hospitals may use this document when all or a portion of the inpatient hospital stay may not be covered by Medicare Part A. It will explain why Medicare may not provide coverage, and an estimate of what will be owed if services are continued to be received. 

Fee-for-service ABNs are used when services may not be covered by Medicare Part B. Some examples of these are: 

ABNs have three options to choose from:

  1. You want to continue receiving the items or services that may not be covered by your Medicare plan. In this case, you may have to pay up front initially, but the provider will still submit a claim to Medicare. If the claim is denied, you can appeal. If the claim is approved, Medicare will refund the money that you paid.
  2. You want to continue receiving the items or services that may not be covered but you do not want to submit a claim to Medicare. You will most likely have to pay out of pocket for the services and there is no option to appeal the decision because you did not submit a claim.
  3. You don’t want the services or items that may not be covered. By opting out of the services or items, you won’t be responsible for any costs listed in the notice.

As per CMS, the ABN is a formal information collection subject to approval by the Executive Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA). As part of this process, the notice is subject to public comment and re-approval every 3 years. With the latest PRA submission, a change has been made to the ABN. In accordance with Title 18 of the Social Security Act, guidelines for Dual Eligible beneficiaries have been added to the ABN form instructions.

The new ABN has been released, and was originally set to be implemented by the end of August 2020. However, CMS has allowed flexibility to allow a delay of use of the most updated form until January 1, 2021.

The new form can be downloaded at: ABNs may be downloaded from the CMS website at: 

From CMS: “The form needs to be printed on a single page. The page may be either letter or legal-size, with additional space allowed for each blank needing completion when a legal-size page is used. There are 10 blanks for completion in this notice, labeled from (A) through (J). We recommend that notifiers remove the lettering labels from the blanks before issuing the ABN to beneficiaries. Blanks (A)-(F) and blank (H) may be completed prior to delivering the notice, as appropriate. Entries in the blanks may be typed or hand-written, but should be large enough (i.e., approximately 12-point font) to allow ease in reading. (Note that 10 point font can be used in blanks when detailed information must be given and is otherwise difficult to fit in the allowed space.) The notifier must also insert the blank (D) header information into all of the blanks labeled (D) within the Option Box section, Blank (G). One of the check boxes in the Option Box section, Blank (G), must be selected by the beneficiary or his/her representative. Blank (I) should be a cursive signature, with printed annotation if needed in order to be understood.”

Other instructions are at:

On the latest form providers should be alerted to this:

Special guidance for people who are dually enrolled in both Medicare and Medicaid, also known as dually eligible individuals (has a Qualified Medicare Beneficiary (QMB) Program and/or Medicaid coverage) ONLY: Dually Eligible beneficiaries must be instructed to check Option Box 1 on the ABN in order for a claim to be submitted for Medicare adjudication. Strike through Option Box 1 OPTION 1-  I want the (D) listed above. You may ask to be paid now, but I also want Medicare billed for an official decision on payment, which is sent to me on a Medicare Summary Notice (MSN). I understand that if Medicare doesn’t pay, I am responsible for payment, but I can appeal to Medicare by following the directions on the MSN. These edits are required because the provider cannot bill the dual eligible beneficiary when the ABN is furnished. Providers must refrain from billing the beneficiary pending adjudication by both Medicare and Medicaid in light of federal law affecting coverage and billing of dual eligible beneficiaries. If Medicare denies a claim where an ABN was needed in order to transfer financial liability to the beneficiary, the claim may be crossed over to Medicaid or submitted by the provider for adjudication based on State Medicaid coverage and payment policy. Medicaid will issue a Remittance Advice based on this determination. Once the claim is adjudicated by both Medicare and Medicaid, providers may only charge the patient in the following circumstances: 

  • If the beneficiary has QMB coverage without full Medicaid coverage, the ABN could allow the provider to shift financial liability to the beneficiary per Medicare policy.
  • If the beneficiary has full Medicaid coverage and Medicaid denies the claim (or will not pay because the provider does not participate in Medicaid), the ABN could allow the provider to shift financial liability to the beneficiary per Medicare policy, subject to any state laws that limit beneficiary liability

By staying up-to-date on compliance rules and regulations clinics can avoid issues down the road with billing issues as well as clinic audits.

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