Advanced Beneficiary Notice

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The information in this column pertains only to people who are on Medicare. When you are eligible for Medicare benefits and have your Medicare ID card, you are referred to as a Medicare beneficiary.

Medicare pays for many medical services and medical care that we may require. While Medicare pays for almost everything that can be done to us from a medical standpoint, there are some services that simply are not covered by Medicare. A service that is not covered by Medicare is known as an ‘ineligible service.’ This does not mean that you do not need the particular test or service that your doctor is recommending; it simply means that this is an item that Congress did not authorize for Medicare reimbursement. If your physician orders a test that is not covered by Medicare, you are supposed to be given an ‘Advanced Beneficiary Notice’ (ABN) to sign. The ABN will state what the service is that your doctor is recommending and that it is not covered by Medicare. It will also state why it is not covered by Medicare. This means you are responsible for paying for this entire service or procedure out of your pocket. You must sign the ABN before the procedure is performed. By signing this document you agree that you will pay the provider and/or the hospital for the procedure. You can, of course, refuse to have the test or procedure done. However, you will want to discuss that very carefully with your physician.

The ABN will state, “Your physician may order a test(s) to be performed which he/she believes to be relevant to evaluate, monitor and protect your health. However, Medicare will only pay for services which it determines to be “reasonable and necessary.” If Medicare determines that a particular test or service is not “reasonable and necessary” under Medicare standards, then Medicare will deny payments for that test or service.” The test or procedure that was supposed to be performed will then be listed on the Advanced Beneficiary Notice and a reason will be given as to why they believe Medicare will not pay for it. Some of the reasons why Medicare does not pay for certain procedures are:

Medicare does not pay for routine exams and tests for screening purposes, which are excluded from coverage.
Medicare does not pay for tests which are “investigative or for research use only.”

Medicare may not pay for test(s) for persons with your diagnosis or no diagnosis. This means the diagnosis must always justify the need for the test. For example, if the diagnosis says “hypertension” and you have a glucose tolerance test, the test will not be covered because you do not need a glucose tolerance test if you have hypertension. If, however, the diagnosis is stated as “diabetes”, then this test will be covered.

Medicare allows payment for this test (s) a limited number of times within a specified time period. The hospital has no way to know of previous Medicare billings for the same procedure by other hospitals.

Medicare does not pay for laboratory test(s), which have not been approved by the Food and Drug Administration.

When you have a test or procedure done in the hospital, you usually receive two bills. One is for the physician who is interpreting the test or doing the procedure, and the other bill is for the use of the hospital equipment and/or room. Many area hospitals have not bothered to have patients sign an ABN when a test or procedure was not eligible for reimbursement. The hospitals knew that they could not bill you. This represents a substantial amount of lost revenue for the hospitals. I have been told by some of the local hospitals that they will now require that an ABN be signed for any test or procedure that may be performed on you that will likely not be covered by Medicare. This means that when you sign the statement you will be responsible for paying not only the physician but also the hospital.

It is important to understand that even though Medicare may deny payment for a test or procedure that your doctor feels you should have, it does not mean that this test or procedure is NOT medically necessary for you. Your physician will only order tests that are necessary for your well-being. If Medicare doesn’t pay for it, it is unfortunate but it is not an indicator that you do not need the work done.

Do not sign a blank ABN. Make sure that the ABN specifies the test or service that might be denied and make sure it specifies the reason why it may be denied. If you refuse to sign this form and you still demand and receive the services, you will be personally and fully responsible for payment.

In closing, this is nothing new. Advance Beneficiary Notices have been required for many years, it is just that many providers and hospitals never enforced it and now you can expect to receive these notices for your signature, when relevant. Always make sure you understand what you are signing. If you don’t want to read the entire document placed in front of you, ask for a detailed explanation and then peruse the document to make sure the explanation given to you agrees with the documentation you are about to sign.

Irene Card & Betsy Card Chandler share the responsibilities of running Medical Insurance Claims, Inc. a health insurance services company . If you have questions relative to this column or other related topics, we invite you to call (973) 492-2828, or visit our contact page.