Better Safe Than Sorry—Why You Should Offer ABNs

“Medical necessity.” It’s a big phrase in the revenue cycle realm—especially when you represent an ambulatory surgical center (ASC) that deals almost entirely in elective procedures. And it's for this very reason that you and your staff should understand the purpose and process for Medicare’s advanced beneficiary notice (ABN).

So what exactly is an ABN and why should your center be concerned with its use? Let’s break down the basics with a simple “Who, What, Where, When & Why.”

1. 1. What is an ABN?
2. An ABN is simply a written notice. It tells the receiving patient that Medicare is unlikely to cover the costs of their selected procedure, outlines what their financial obligation will be if they move forward, and explains why Medicare may not cover the cost.
3. Care to guess the most common reason for offering an ABN? Yup. Medical necessity. Even for procedures that Medicare will typically cover, if it is not deemed medically necessary they can refuse to cover it.
4. 2. Who needs one?
5. Any patient covered by Original Medicare should receive an ABN if their provider thinks a selected procedure will not be covered.
6. 3. Why is it important?
7. Protection—for both the facility and patient. For the facility, an ABN offers assurance of payment because they can avoid a Medicare denial and immediately collect from the patient. Meanwhile, it prevents financial surprises for the patient, allowing them to make a fully informed decision, and contributes to their satisfaction with the facility.
8. 4. When is it necessary?
9. If an ASC believes Medicare will not cover the costs of a particular procedure, it is their responsibility to give the patient an ABN. This frees the facility to collect payment upfront and bill the patient directly for any remainder. But it’s also worth noting that the ABN is not a binding agreement—the patient is free to appeal the denial of coverage even after they sign the ABN and undergo the procedure.
10. 5. Where does it fall in the revenue cycle?
11. Everyone likes to get paid upfront, so that’s when you want to issue the ABN. Immediately following insurance verification, during scheduling, as part of a pre-op visit—just make sure the ABN is delivered, signed and returned before the procedure takes place.

Failure to provide an ABN will almost certainly lead to denial and, in most cases, require the responsible ASC to write off the procedure costs entirely. No one can afford that kind of bad debt. If this seems like a lot to consider for a simple written notice, let Full Circle Business Solutions take a look at your front-of-house processes and help you develop a plan that sets up your revenue cycle for consistent success!