How are ABN (Advanced Beneficiary Claims) Handled?

How are ABN (Advance Beneficiary Notice) claims handled?

Medicare will accept ABNs on upgrades. For Medicare purposes, CMS defines an upgrade as an item that is more expensive, contains more components or features, or is greater in quantity than what the physician ordered. The upgraded item may be from one HCPCS code to another, or within the same HCPCS code. However, the upgraded item must be within the range of services that are appropriate for the beneficiary's medical condition. For example, the beneficiary can upgrade from a standard manual wheelchair to an ultralight wheelchair, but not from a cane to a wheelchair. Whether or not to upgrade is the beneficiary's choice.

ABNs for upgrades can apply to both assigned and unassigned claims.

Filing Claims When ABN Is Used for Upgrades

To provide a free upgrade: Use the appropriate HCPCS code for the non-upgraded item that the physician ordered. You must only charge for the non-upgraded item. Use a GL modifier with the HCPCS code. In Item 19 of the claim, or as an attachment to the claim, specify the make and model of the upgraded item you actually furnished, and describe why this item is an upgrade (e.g., you provided an ultralight wheelchair when the physician ordered a standard wheelchair). Electronic media claim filers should use the HA0 record for this purpose. 

To charge for the difference between the Medicare allowable for a non-upgraded item and an upgrade: List two lines on your claim. On the first line, list the upgraded item with a GA or GZ modifier. Use the GA modifier if the beneficiary signed an ABN, and the GZ modifier if the beneficiary did not sign an ABN. A certificate of medical necessity (CMN) is not required for this item.

On the second line, list the item the physician actually ordered. A CMN is required for this item. Use a GK modifier on this line. 

If you are upgrading from one item to another within the same HCPCS code, this will be the same HCPCS code you put on line one, but with a different charge amount. You must indicate the full charge for each item on the claim form, not the difference between the two. 

You may include more than one upgraded item on a claim. However, for items where you provide an upgrade, you must list the non-upgraded item on the line immediately following the upgraded item. 

The following are examples on how to file claims with an ABN and without an ABN:

Setup TeamDME to bill ABN claims.
1. First create a new item for the ABN with: ItemID: ABN, Description: ABN (Advanced Beneficiary Notice), Sale/Rent: Sale, Category: MISC. All other fields should be left blank or zero as the default indicates. 

Note: If you are using the Ledger, you will want to set the G/L Revenues account number to your Non-Allowed Expense account number. This insures that posting an ABN item will wash the Revenue vs. Nonallowed amount in order to keep your Revenue for being overstated.

2. Next, create a TIE for the Item and each Medicare payor you want to submit to indicating that the allowed amount will be zero. The way to do this is to enter a (-1) in the Allowed amount. 

As you enter each new ABN claim.
1. First enter the item you are providing to the patient as you normally would, except include the GA or GZ modifier to indicate whether the patient has signed or not signed an ABN.

2. Add a new item to the order immediately after the item to be upgraded. Enter the ItemID: ABN. Enter all other information as if you were providing this item as the physician ordered. Make sure you include the GK modifier to indicate this item has been upgraded.

Note: As you enter the ItemID, you should notice the Allowed amount showing (-1) to indicate a zero Nonallowed.

3. Treat the ordered item the same as you would the provided item. Mark the ordered item delivered when you mark the provided item delivered. This puts the ordered item on the same invoice/claim with the provided item and allows the system to process them together.

Note: Your goal here is to keep the ordered item on the same claim with the provided item and allow the two of them to be submitted to the payor at the same time.

Note: If you need to include a CMN with the item, you must enter the CMN with the ordered item, not the provided item. But you will want to include a CMN Expiration date with both items to insure that neither of them print until they are both ready to print.

Accounting Effects
1. You will notice when you run any of the Transaction and Revenue reports that the Revenue will be overstated by the amount of the ordered item(s) as well as the Nonallowed amount. The net effect will of course be a difference of zero. 

2. The Patient’s Invoice and Statement will show both the provided and ordered products and the writeoff to nonallowed of the ordered item.

3. By sending the Revenue amount to the Nonallowed account, we are choosing to wash the charge for the ordered item out. (ie: choosing not to overstate either Revenue or Nonallowed amounts). If you wanted to mimic the Revenue reports, you could choose not to insert the Nonallowed account in the Revenue account of the Item number. This would increase the Revenue as well as the Nonallowed amount. The net effect will of course be a difference of zero.