The analysis of any legal or medical billing is dependent on numerous specific facts — including the factual situations present related to the patients, the practice, the professionals and the medical services and advice. Additionally, laws and regulations and insurance and payer policies are subject to change. The information that has been accurate previously can be particularly dependent on changes in time or circumstances. The information contained in this web site is intended as general information only. It is not intended to serve as medical, health, legal or financial advice or as a substitute for professional advice of a medical coding professional, healthcare consultant, physician or medical professional, legal counsel, accountant or financial advisor. If you have a question about a specific matter, you should contact a professional advisor directly. CPT copyright American Medical Association. All rights reserved. CPT is a registered trademark of the American Medical Association.
Mandatory ABN Uses
Mandatory ABN Uses
The following provisions necessitate delivery of the ABN:
Services Not Reasonable and Necessary
Common reasons for Medicare to deny an item or service as not medically reasonable and necessary include care that is:
Items and services which are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member are not covered, e.g., payment cannot be made for the rental of a special hospital bed to be used by the patient in their home unless it was a reasonable and necessary part of the patient’s treatment.
A health care item or service for the purpose of causing, or assisting to cause, the death of any individual (assisted suicide) is not covered. This prohibition does not apply to the provision of an item or service for the purpose of alleviating pain or discomfort, even if such use may increase the risk of death, so long as the item or service is not furnished for the specific purpose of causing death.
Violation of the Prohibition on Unsolicited Telephone Contacts
DMEPOS suppliers are prohibited from making unsolicited telephone contacts, sometimes referred to as “cold calling” to Medicare beneficiaries. There are however, three exceptions where a supplier may contact our beneficiaries by telephone.
These exceptions are:
To qualify for waiver of the Refund Requirements under §1834(a)(18) or §1879(h)(3) of the Act (unassigned and assigned claims, respectively), an ABN must clearly identify the particular item or service and state that the supplier expects that Medicare will deny payment for that particular medical equipment or supplies because the supplier violated the prohibition on unsolicited telephone contacts. The supplier must obtain a signed ABN before furnishing the item to the beneficiary. Since it is the unsolicited telephone contact which is prohibited by law, giving advance beneficiary notice by telephone does not qualify as notice and is not permissible. Telephone notice may not be used in this case. The contractor will not accept any telephone ABN as effective notice to the beneficiary. Since giving or mailing a written ABN and obtaining the beneficiary’s agreement to pay before telephoning is equivalent to obtaining the beneficiary’s written permission for the supplier to telephone, a supplier has little to gain from using the ABN process instead of simply seeking the beneficiary’s written permission to contact him or her. If a supplier does use a written ABN prior to calling, the beneficiary’s agreement to pay is essential under the Refund Requirements in order for the supplier to collect from the beneficiary. Medicare denial of payment because of the prohibition on unsolicited telephone contacts applies to all varieties of medical equipment and supplies and to all Medicare beneficiaries equally. Therefore, the usual restriction on routine notices to all beneficiaries does not apply in this case.
Medical Equipment and Supplies Supplier Number Requirements not Met
All suppliers of DMEPOS and other items and services must be accredited by a CMS approved accreditation organization in order to receive and retain a supplier billing number. The accreditation must indicate the specific products and services, for which the supplier is accredited in order for the supplier to receive payment for those specific products and service
To qualify for waiver of the Refund Requirements under §1834(j)(4)(A) and §1879(h)(1) of the Act (unassigned and assigned claims, respectively) for medical equipment and supplies for which payment will be denied due to failure to meet supplier number requirements under §1834(j)(1) of the Act, the ABN must state that Medicare will deny payment for any medical equipment or supplies because the supplier does not have a supplier number. The ABN must convey to the beneficiary the certainty of denial, so that the beneficiary can make an informed consumer decision whether to receive the medical equipment or supplies and pay for it out of pocket. The following is acceptable language for the ABN-G “Because:” box: “Medicare will pay for items furnished to you by a supplier of medical equipment and supplies only if the supplier has a Medicare supplier number. Payment for such items furnished to you by a supplier which does not have a supplier number is prohibited under the Medicare law. We do not have a Medicare supplier number, therefore, Medicare will not pay for any medical equipment and supplies which we furnish to you.” It is particularly important that the beneficiary’s signed agreement to pay should be dated by the beneficiary because, in this type of denial, any proper written advance notice with the beneficiary’s signed agreement to pay shall be effective for any medical equipment or supplies purchased or rented from the same supplier within the one year following the date of the beneficiary’s signed agreement to pay. This exception relieves the supplier, which has duly notified a beneficiary of its lack of a supplier number and the fact that Medicare will not pay, from the necessity of obtaining a signed agreement from the beneficiary every time the beneficiary does business with the supplier.
Medical Equipment and/or Supplies Denied in Advance
To qualify for waiver of the Refund Requirements for medical equipment and supplies for which payment is denied in advance, the ABN-G must clearly identify the particular item of medical equipment and supplies and must state in the “Because:” box either: “Medicare has denied payment in advance and we expect that Medicare will continue to deny payment.” or “Medicare requires that we request an advance determination of coverage of this medical equipment and/or supplies. We have not requested an advance determination, so we expect that Medicare will deny payment.” as applicable. Denial of payment in advance under §1834(a)(15) of the Act refers both to cases in which the supplier requested an advance determination and you determined that the item would not be covered, and to cases in which the supplier failed to request an advance determination when such a request is mandatory.
Custodial care is excluded from coverage. Custodial care serves to assist an individual in the activities of daily living, such as assistance in walking, getting in and out of bed, bathing, dressing, feeding, and using the toilet, preparation of special diets, and supervision of medication that usually can be self-administered. Custodial care essentially is personal care that does not require the continuing attention of trained medical or paramedical personnel. In determining whether a person is receiving custodial care, the A/B MAC (A) or (B) considers the level of care and medical supervision required and furnished. It does not base the decision on diagnosis, type of condition, degree of functional limitation, or rehabilitation potential.
Institutional care that is below the level of care covered in a SNF is custodial care. (See the Medicare Benefit Policy Manual, Chapter 8, “Coverage of Extended Care (SNF) Services Under Hospital Insurance,” §30.) Some examples of custodial care in hospitals and SNFs are:
Even if a patient’s stay in a hospital or SNF is determined to be custodial, some individual services may still be covered under Part B if they are reasonable and necessary. For example, periodic visits by a physician to their patient are covered under Part B if such services are reasonable and necessary to the treatment of the patient’s illness or injury even though a finding has been made that the care being furnished the patient in the hospital or SNF is custodial care and, therefore, not covered. Similarly, such a finding of custodial care does not preclude payment for a Part B claim for ancillary services, which are medically necessary.
Hospice Patient who is not Terminally Ill
To be eligible to elect hospice care under Medicare, an individual must be entitled to Part A of Medicare and be certified as being terminally ill. An individual is considered to be terminally ill if the medical prognosis is that the individual’s life expectancy is 6 months or less if the illness runs its normal course. Only care provided by (or under arrangements made by) a Medicare certified hospice is covered under the Medicare hospice benefit.
The hospice admits a patient only on the recommendation of the medical director in consultation with, or with input from, the patient's attending physician (if any).
In reaching a decision to certify that the patient is terminally ill, the hospice medical director must consider at least the following information:
Home health services requirements are not met
To qualify for the Medicare home health benefit a Medicare beneficiary must meet the following requirements:
Personalized Prevention Plan Services
Medicare covered personalized prevention plan services (that are performed more frequently than indicated per coverage guidelines are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.
A noncontract supplier furnishes an item included in the (DMEPOS) Competitive Bidding Program (CBP) for a Competitive Bidding Area (CBA)
§1862 (a)(17) excludes Medicare payment for Competitive Bidding Program (CBP) items/ services that are provided by a non-contract supplier in a Competitive Bidding Area (CBA) except in special circumstances. A non-contracted supplier is permitted to provide a beneficiary with an item or service listed in the CBP when the supplier properly issues an ABN prior to delivery of the item or service per 42 CFR §414.408(e)(3)(ii). In order for the ABN to be considered valid when issued under these circumstances, the reason that Medicare may not pay must be clearly and fully explained on the ABN that is signed by the beneficiary.
Sample wording for the “Reason Medicare May Not Pay” blank of the ABN: Since we are not a contracted supplier, Medicare will not pay for this item. If you get this item from a contracted supplier such as ABC Medical Supplies, Medicare will pay for it.
To be a valid ABN, the beneficiary must understand the meaning of the notice. Suppliers must explain to the beneficiary that Medicare will pay for the item if it is obtained from a different supplier in the area. While some suppliers may be reluctant to direct beneficiaries to a specific contracted supplier, the non-contracted supplier should at least direct the beneficiary to 1-800 –MEDICARE to find a local contracted supplier at the beneficiary’s request.
When Medicare considers an item or service experimental (e.g., a “Research Use Only” or “Investigational Use Only” laboratory test), payment for the experimental item or service is denied as not reasonable and necessary. In circumstances such as this, the beneficiary must be given an ABN.