Notice: Read All About the ABN 2/1/22

Visante/Notice: Read All About the ABN 2/1/22
Notice: Read All About the ABN 2/1/22
Published date: February 1, 2022

Pharmacy teams are increasingly embedding themselves within revenue cycle teams and prior authorization processes within infusion and cancer centers as well as other outpatient departments. As this occurs the term ABN may increasingly become an important factor that pharmacy teams otherwise would not originally have dealt with.  Or, maybe you as a Medicare beneficiary have wondered what they are and their importance. 

Advance Beneficiary Notice of Noncoverage or ABN is a written notice given to Medicare fee-for-service or original Medicare beneficiaries to convey that the item or service may not be covered by Medicare Part B since they are medically unnecessary or custodial in nature. Examples of situations in which an ABN is required include:

  • When a Medicare item or service isn’t reasonable and necessary

  • When providing custodial care

  • Experimental and investigational or considered research only

  • Before providing preventative care that is usually covered but won’t be covered in specific situations in which it exceeds the frequency limits

  • A more complete list may be found here

ABNs are not required for items or services that are considered statutorily excluded by Medicare. They may be given on a voluntary basis or as a courtesy to the beneficiary notifying them of the potential financial liability. The primary example as it pertains to pharmacy is self-administered drugs that are statutorily excluded under payment from Medicare Part B. An ABN is prohibited when the service is denied due to a Medically Unlikely Edit or MUE or when Medicare covers the service under a bundled payment. Additionally, an ABN is not used for Medicare Part D.

The ABN is a protective mechanism for both the Medicare beneficiary and provider related to financial liability. An ABN should be issued far enough in advance for the beneficiary to allow time for the patient to consider all available options. Ideally, an ABN is issued in person and explained in its entirety. The standard, approved form must be used and the patient must elect (option 1) to receive the treatment followed by a signature. When an ABN is issued appropriately to a beneficiary and the beneficiary agrees and signs, financial liability may shift from a provider to the beneficiary in the event of a Medicare denial. 

Shout Outs!

  1. Pharmacy and prior authorization teams should understand the ABN process upon evaluating National and Local Coverage Determinations (NCD and LCD) to understand when drugs may not be covered. 

  2. Clinical teams should ensure documentation supports the medical necessity of the drug, and when a denial is received should determine if an appeal may be more appropriate based on clinical support prior to shifting liability to the patient. 

  3. It is important to understand when it is required, voluntary and prohibited to issue an ABN to a Medicare beneficiary.

  4. Teams should evaluate that a signed form is on file prior to administering drugs that are considered not covered.

Our goal is simple; we’re taking complex information and making it practical. 

Until our next edition, this is Maxie Friemel and Agatha Nolen providing you with tips for increasing your Pharmacy Revenue.

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