9. Advance Beneficiary Notice (ABN)

An Advance Beneficiary Notice (ABN) is a written notice that you may give to a Medicare beneficiary before providing items and/or services that Medicare otherwise might pay for, but for this particular occasion is expected to deny. The ABN allows the beneficiary to make an informed consumer decision as to whether or not to receive the items or services for which he or she may have to pay out of pocket or through other insurance. An ABN should be issued prior to dispensing an item or service expected to be disallowed for the following reasons:

  • Lack of medical necessity
  • Prohibited, unsolicited telephone contacts
  • Supplier number requirements not met
  • Denial of an Advanced Determination of Medicare Coverage (ADMC) request
  • Noncontracted suppliers in a competitive bidding area (CBA)

If you fail to issue a properly executed ABN, you will be held liable for the item and/or service and may not bill or collect, or must refund amounts collected, from the beneficiary.

An ABN can remain in effect up to a year for an extended course of treatment with no other new events. Once the beneficiary signs the ABN, it may not be modified or revised.

You must retain a copy of the signed ABN on file. The ABN should not be submitted with the claim, but is required when responding to an additional documentation request for a complex review, in which case CGS will conduct a face validity assessment of the ABN to ensure liability is assigned appropriately in accordance with the Limitation of Liability Provisions.

The current version of the Advanced Beneficiary Notice of Noncoverage (ABN) is form CMS-R-131 (03/2020). Other forms will be considered invalid. The ABN form CMS-R-131 (03/2020) can be found online on the Beneficiary Notice Initiative Web page at http://www.cms.gov/Medicare/Medicare-General-Information/BNI/ABN.html.

For an ABN to be acceptable, it must:

  • Be on the approved CMS-R-131 (03/2020) form;
  • Clearly identify your name, address, and telephone number;
  • Clearly identify the beneficiary;
  • Clearly identify the particular item and/or service;
  • State that you believe Medicare is likely (or certain) to deny payment for the particular item and/or service; and
  • Give your reason(s) for your belief that Medicare is likely (or certain) to deny payment for the item and/or service.
  • Give a reasonable estimate cost of the noncovered item and/or service
  • Be signed and dated by the beneficiary or representative.

The ABN completion instructions are available in the CMS Manual System, Pub. 100-4, Medicare Claims Processing Manual, Chapter 30, § 50.6.3.

ABNs are not required for care that is either statutorily excluded from coverage under Medicare (i.e., care that is never covered) or fails to meet a technical benefit requirement (i.e., lacks required certification); however, the ABN form CMS-R-131 (03/2020) can be issued voluntarily.

ABNs apply to assigned and nonassigned claims, as there are financial liability provisions under Medicare law for both claim types:

Limitation of liability (LOL) applies to assigned claims for DMEPOS services disallowed because of medical necessity, due to prohibition on unsolicited telephone calls, no supplier number, or no ADMC. Under LOL, a beneficiary can be held liable for a service denied due to reasons cited on the ABN.

Refund requirements (RR) apply to assigned and non-assigned claims for DMEPOS services disallowed because of medical necessity, due to prohibition on unsolicited telephone calls, no supplier number, or no ADMC. RR state that suppliers must make refunds of any amounts collected if the beneficiary was not properly notified of possible disallowed Medicare claims. The RR provisions require that the beneficiary is notified and agrees to be financially liable.

If you render a service which Medicare considers not medically necessary to a beneficiary, you should notify the beneficiary in writing, before rendering the service, that Medicare is likely to deny the claim and that the beneficiary will be responsible for payment. Modifier “GA” should be indicated on the Medicare claim with the appropriate HCPCS code when it is filed. See Chapter 16 of this manual for more information about modifiers.

The following statements are examples of reasons for your belief that Medicare is likely to deny payment:

  • Medicare does not usually pay for this many treatments or services
  • Medicare usually does not pay for this service
  • Medicare does not pay for this because it is a treatment that has yet to be proved effective (experimental)
  • Medicare does not pay for this many services within this period of time
  • Medicare does not pay for such an extensive treatment

General statements such as “I never know if Medicare will deny payment” are not acceptable.

The beneficiary or his or her representative has the right to appeal a claim decision if there is dissatisfaction with the amount of payment, denial of coverage for services or supplies, or if the original claim was not acted upon within a reasonable time. You have the right to appeal a claim decision when you accept assignment.

As a supplier providing items and services to Medicare beneficiaries, you may appeal an initial determination if:

  • You accepted assignment on the claim; or
  • You are acting as the duly authorized representative of the beneficiary.

See chapter 13 of this manual for more information about appeals.

When you furnish an upgraded item of DMEPOS and expect Medicare to reduce the level of payment based on a medical necessity partial denial of coverage for additional expenses attributable to the upgrade, you must give an ABN to the beneficiary for signature for holding the beneficiary liable for the additional expense.

For complete instructions on using an ABN, refer to the CMS Manual System, Pub. 100-04, Medicare Claims Processing Manual, Chapter 30, §50, which is available at http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c30.pdf. Instructions are also available on the Beneficiary Notice Initiative Web page at http://www.cms.gov/Medicare/Medicare-General-Information/BNI/ABN.html.

10. Miscellaneous Documentation Issues

Repair/Maintenance/Replacement

Under the circumstances specified in the Medicare Benefit Policy Manual, payment may be made for repair, maintenance, replacement, and delivery of medically-required DME which the beneficiary owns or is purchasing, including equipment which had been in use before the user enrolled in Part B of the Medicare program. In addition, payments for repair and maintenance may not include payment for parts and labor covered under a manufacturer’s or supplier’s warranty.

Repairs to DMEPOS (Except Artificial Limbs)

A new Certificate of Medical Necessity (CMN) and/or practitioner’s order is not needed for repairs.

In the case of repairs to a beneficiary-owned DMEPOS item, if Medicare paid for the base equipment initially, medical necessity for the base equipment has been established. With respect to Medicare reimbursement for the repair, there are two documentation requirements:

  1. The treating practitioner must document that the DMEPOS item being repaired continues to be reasonable and necessary (see Continued Medical Need section above); and
  2. Either the treating practitioner or you must document that the repair itself is reasonable and necessary.

You must maintain detailed records describing the need for and nature of all repairs, including a detailed explanation of the justification for any component or part replaced, as well as the labor time to restore the item to its functionality.

A treating practitioner’s order and/or new Certificate of Medical Necessity (CMN), when required, is needed to reaffirm the medical necessity of the item for replacement of an item.

Repair/Replacement only Applying to Lower Limb Prostheses

Adjustments and repairs of prostheses and prosthetic components are covered under the original order for the prosthetic device.

Medicare payment may be made for the replacement of prosthetic devices which are artificial limbs, or for the replacement of any part of such devices, without regard to continuous use or useful lifetime restrictions if a treating practitioner determines that the replacement device, or replacement part of such a device, is necessary. Claims involving the replacement of a prosthesis or major component (foot, ankle, knee, socket) must be supported by a new treating practitioner’s order and documentation supporting the reason for the replacement. The reason for replacement must be documented by the treating practitioner, either on the order or in the medical record, and must fall under one of the following:

  1. A change in the physiological condition of the patient resulting in the need for a replacement. Examples include but are not limited to: changes in beneficiary weight, changes in the residual limb, and beneficiary functional need changes; or
  2. An irreparable change in the condition of the device or in a part of the device resulting in the need for a replacement; or
  3. The condition of the device, or the part of the device, requires repairs and the cost of such repairs would be more than 60 percent of the cost of a replacement device, or, as the case may be, of the part being replaced.

The prosthetist must retain documentation of the prosthesis or prosthetic component replaced, the reason for replacement, and a description of the labor involved irrespective of the time since the prosthesis was provided to the beneficiary. This information must be available upon request. It is recognized that there are situations where the reason for replacement includes but is not limited to: changes in the residual limb, functional need changes, or irreparable damage or wear/tear due to excessive beneficiary weight or prosthetic demands of very active amputees.

Refer to the individual medical policies for specific coverage and payment provisions.

Delivery and Service Charges

Delivery and service are an integral part of the costs of doing business if you are an oxygen and durable medical equipment (DME) supplier. Such costs are ordinarily assumed to have been taken into account (along with all other overhead expenses) in setting the prices that you charge for covered items and services. As such, these costs, whether rented or purchased, have already been accounted for in the calculation of the fee schedules. Therefore, separate delivery and service charges for DMEPOS items will not be allowed except in rare and unusual circumstances when the delivery is outside the normal range of your sphere of operation. For example, a reasonable delivery charge might be allowed if you had to deliver a DMEPOS item to a beneficiary who lived outside your usual customer area and who had no access to another supplier located nearer. You must fully document these “unusual circumstances” on claims filed for delivery charges. These claims will be considered on an individual basis.

Same/Similar Equipment and Advance Beneficiary Notices (ABN)

This concerns ANSI Reason Code M3 – “Equipment is the same or similar to equipment already being used.” See Chapter 17 of this manual for information about ANSI Reason Codes.

Numerous claims for durable medical equipment are denied because the equipment involved is the same as or similar to equipment already in the possession of the beneficiary. The statutory basis for denial of such claims is medical necessity; therefore, the limitation of liability provision under Section 1879 of the law applies. Backup equipment (standby and precautionary) has no coverage benefit and is considered not medically necessary. See the section Backup Equipment below.

Liability is assessed on claims denied based on “same or similar equipment.” You are expected to be familiar with DME MAC coverage policies and any additional pertinent information that may have an impact on medical necessity determinations. In order to be protected under the limitation of liability provision, you must provide a proper advance beneficiary notice (ABN) for each item that you believe is likely to be denied as not medically necessary.

There must be a specific, identifiable reason to believe that Medicare may not pay for certain DME items (e.g., “same or similar equipment”). This means that you must obtain all the possible information from beneficiaries in order to determine whether “same or similar equipment” has previously been provided to that beneficiary. You should ask very specific questions when providing items to Medicare patients. When providing equipment to beneficiaries, the following information should always be obtained:

  • The beneficiary’s correct Medicare ID
  • If the beneficiary has employer insurance or is enrolled in a Medicare Advantage Plan
  • If the beneficiary currently has or had rental or ownership of an identical or similar item(s) in the past, you should obtain specific information about:
    • When the beneficiary received the item(s), and if the item(s) was returned, when and why
    • Who supplied the item(s)
    • CMN or DIF information
  • Where the item will be used
  • A signed and dated written order from the prescribing practitioner
  • Clinical documentation that demonstrates any change in medical need

You may also access information about any previously submitted same or similar equipment through the CGS Interactive Voice Response System (IVR). This IVR information can be reached by calling 1.866.238.9650, selecting Option 2, and pressing 2 for CMN status. This option will provide CMN information on file for the procedure code entered and also CMN information on any similar equipment on file for a beneficiary. Facsimile CMN records are established in our system even for equipment which no longer requires actual CMNs (such as manual wheelchairs). For more information about the IVR, see Chapter 13 of this manual.

You should make certain that the beneficiary understands that items such as wheelchairs and power-operated vehicles are considered “similar equipment” and that Medicare will not cover both items when they are used simultaneously. You should strongly encourage the beneficiary to inform you if the medical need for the item changes and the beneficiary requires a different piece of equipment that serves a similar purpose. The Medicare program will only allow items that meet the beneficiary’s current needs.

For example, if a beneficiary is renting a manual wheelchair and his/her condition worsens to the point that only a different wheelchair, such as a power wheelchair, will meet his/her medical need, coverage will be allowed for the power wheelchair and any subsequent claims for the manual wheelchair will be denied.

If there is no indication that same or similar equipment has been previously obtained, you would not have reason to provide an ABN. If the beneficiary or the beneficiary’s authorized representative is unable to respond fully on the issue of “same or similar equipment,” you may issue an ABN. In situations where the beneficiary is planning to use a piece of equipment as a backup (e.g., an extra wheelchair to keep in the car), you should ALWAYS obtain a signed ABN. In the event that you appeal a Medicare claim decision, you must submit a copy of the ABN with the appeal request (see Chapter 13 of this manual for information about appeals).

Same or similar rules may not necessarily apply to situations where a new device with additional technological features becomes available. The DME MAC or UPIC must evaluate whether the new feature(s) meets the beneficiary’s medical need and that the need is not met by their current equipment. If the new feature or device meets a current medical need that is not met by the current equipment because the appropriate technology was not available at the time the beneficiary obtained the item, even if there has been no change in the beneficiary’s condition, the five-year useful lifetime rules do not apply and the new item may be provided. However, if the new item is meeting the same medical need as the old item but in a more efficient manner or is more convenient, AND there is no change in the beneficiary’s condition, Medicare will NOT reimburse for the new item.

The following examples illustrate these instructions:

  1. The beneficiary receives a power wheelchair without power tilt/recline. Subsequently it is determined that the beneficiary needs a tilt/recline AND he/she has needed it since the provision of the initial power wheelchair. Often, the old wheelchair base will not accommodate the new tilt/recline system; therefore, in addition to the tilt/recline, you ask for a wheelchair base to be reimbursed. In this case one of the following options would apply:
    1. A. If the old wheelchair is rented, an additional amount for the tilt/recline would be allowed but not a new rental period for the new wheelchair base.
    2. B. If the old wheelchair was purchased, only reimbursement of the tilt/recline would be allowed and not the purchase of a new wheelchair base.
  2. Code E2101 represents a code for a home glucose monitor that integrates the lancing and application of blood to the glucose testing strip in one machine. The Glucose Monitors Local Coverage Determination (LCD) allows payment for these devices for beneficiaries with manual dexterity problems. If a beneficiary had manual dexterity problems at the time that an E0607 monitor was purchased and the technology of monitors coded E2101 was not available at the time the beneficiary obtained the E0607, they would be allowed to purchase the E2101 to address their medical need for a monitor that accommodates their dexterity problem. No “same or similar” denial would apply. The E0607 did not accommodate their medical need and while their medical need did not change, technology changed such that their medical need could now be met by the new technology.

These rules apply when the new device with advanced features is classified by the same HCPCS code as the older device or when described by a different HCPCS code. If, however, the new device is described by a different code, the beneficiary must also meet the coverage criteria of the new item.

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