Use the right forms, in the right way, to ensure payment.

Exciting new technologies, including some for glaucoma surgeons, might not be covered by Medicare and other third-party payers until sufficient scientific data support them. During the time between FDA clearance or approval and issuance of favorable coverage policies, ophthalmologists need to ensure they are paid for noncovered services by holding the beneficiary financially responsible for payment. This relies on financial waiver forms or other steps, which, if not followed, limit or nullify the beneficiary’s liability.

Ordinary Medicare ABN

An Advance Beneficiary Notice of Noncoverage (ABN) is a written notice a health care provider gives to a Medicare beneficiary when the provider believes that Medicare will not pay for items or services. It is required for both assigned and nonassigned claims. By signing an ABN, the Medicare beneficiary acknowledges that he or she has been advised that Medicare will not pay and agrees to be responsible for payment, either personally or through another insurance plan. For an ABN to have any utility, it must be signed before providing the item or service.

You do not need an ABN for items or services that are statutorily (ie, by law) noncovered by Medicare, for example routine eye exams with refraction. Instructions, published on September 5, 2008, allow the use of an ABN voluntarily for items excluded from Medicare coverage. You may choose to notify a beneficiary that these services are never covered using the ABN. Written notification is strongly recommended to avoid confrontations with beneficiaries about payment.

The format of an ABN cannot be modified to any significant degree. You must add your name, address, and telephone to the header. You may add your logo and other information if you wish. The “Items or Services,” “Reason Medicare May Not Pay,” and “Estimated Cost” boxes are customizable, so you can add preprinted lists of common items and services or denial reasons. Anything you add in the boxes must be high contrast ink on a pale background. Blue or black ink on white paper is preferred. You may not make any other alterations to the form. It must be one page and single sided, although an addendum is allowed.

You must complete your portion of the form before asking the beneficiary to sign. Fill in the beneficiary’s name and identification number (but not HIC number) at the top of the form. Complete the “Items or Services” box, describing what you propose to provide. Use simple language the beneficiary can understand. You may add CPT or HCPCS codes, but codes alone are not sufficient without a description. Complete the “Reason Medicare May Not Pay” box with the reason(s) you expect a denial. The reason(s) must be specific to the particular patient; general statements such as “medically unnecessary” are not acceptable. The “Estimated Cost” field is required.

The beneficiary must personally choose option 1, 2, or 3. A practice representative may not make this election. The patient must sign and date the form; an unsigned or undated form is not valid. Once the patient has signed the completed form, he or she must receive a legible copy. The same guidelines apply to the copy as to the original: blue or black ink on white paper is preferred; a photocopy is fine. You keep the original in your files.

If the beneficiary chooses option 1, you must file a claim and append an appropriate modifier to the reported item(s) or service(s). In CMS Transmittal R1921CP, effective April 1, 2010, two modifiers were updated to distinguish between voluntary and required use of liability notices. This change addresses the fact that most beneficiaries will elect option 1 in the hope that Medicare might pay, despite your assurances to the contrary.

Modifier GA was redefined as “Waiver of Liability Statement Issued as Required by Payer Policy.” When coverage is uncertain, you ask the patient to sign an ABN and submit your claim with modifier GA, allowing the payer to decide if the service is covered. Modifier GX is new and defined as “Notice of Liability Issued, Voluntary Under Payer Policy.” If the patient selects option 1, append modifiers GX and GY to that claim as those services are noncovered. Modifier GY is defined as “Item or service statutorily excluded or does not meet the definition of any Medicare benefit.”

Option 2 applies when Medicare is precluded from paying for the item or service and the beneficiary does not dispute the point. Do not file a claim; do post the item or service in your computer system with modifier GY. These CMS instructions make the former voluntary Notice of Exclusion from Medicare Benefits (NEMB) obsolete and replace it with the ABN.

Medicare Advantage

Medicare Advantage plans (Medicare Part C) are prohibited from using the regular Medicare ABN form but may still require prior financial notice. On May 5, 2014, CMS instructed that all Medicare Advantage Organizations (MAOs) should follow the process for issuing a notice of a denial of coverage in accordance with 42 CFR §§ 422.568 and 422.572. CMS explained that, “Original Medicare ABN notices were established in order to allow a Medicare beneficiary to find out whether a service is covered by Medicare without having to receive services, and then submit a claim for reimbursement for the costs of such services. By their own terms, the ABN requirements in the statute and regulations do not apply in the Medicare Advantage context. This is because a Medicare Advantage enrollee has always had the right under the statute and regulations to an advance determination of whether services are covered prior to receiving such services.” An ophthalmologist cannot collect payment for a service from a Medicare Advantage beneficiary that might not be covered. Rather, CMS policy in the Medicare Managed Care Manual, Chapter 4, §170 states “that services and referrals ... are considered plan-approved unless notice is provided to the enrollee that the services will not be covered.” This shifts responsibility from the beneficiary to the MAO. “The furnishing of the item or service is a favorable organization determination made on behalf of the MAO. If the provider does not furnish the item or service (or does not make a referral) because the provider believes the item or service may not be covered, the contracted provider must advise the enrollee to request a preservice organization determination from the MAO or the provider can request the organization determination on the enrollee’s behalf.”

Ophthalmologists who serve Medicare Advantage beneficiaries may find that these patients cannot be held financially responsible for payment of services that the ophthalmologist believes are not covered by the MAO plan unless the organization determination process has been followed. This lengthens the time between the decision for surgery and the date of surgery. Experience teaches us that each MAO has slightly different methodology for making the organization determination. Check plan websites for instructions.

Other Third-Party Payers

For non-Medicare beneficiaries, the concept of waiver of liability may not be present, or as rigorous. However, it is still prudent to ensure that patients appreciate the distinction between covered and noncovered services and accept financial responsibility for the latter. GP

Kevin J. Corcoran, COE, CPC, CPMA, FNAO, is president and co-owner of Corcoran Consulting Group.