Revision to the Advance Beneficiary Notice of Noncoverage (ABN)

Effective with November 1, 2011, a slightly revised version of the “Advance Beneficiary Notice of Noncoverage (ABN)” will go into mandatory effect. (Medicare confusingly uses the acronym “ABN” with only one “N” to refer to this.) Technically this new version is “Form CMS-R-131 (03/11).” Given even this small change, it is perhaps a good time to review the Advance Beneficiary Notice of Noncoverage, as these can be very important to Medicare beneficiaries.

You should know that The Centers for Medicare & Medicaid Services has proscribed four Advance Beneficiary Notices. Three of them are quite specialized to a particular type of care:

An Important Message from Medicare (IM) - Form CMS-R-193 (inpatient hospital)

Skilled Nursing Facility Advanced Beneficiary Notice (SNFABN) - Form CMS-1055

Home Health Advance Beneficiary Notice (HHABN) - Form CMS-R-296

These are discussed beginning on page 197 of Managing Your Medicare.

And one is general and used in all other care settings:

Advance Beneficiary Notice of Noncoverage - Form CMS-R-131

This is the form which is changing in November and which we discuss here.


Sometimes this notice is touted as your friendly “Protection from Unexpected Bills,” but it’s not as simple as all that. Because when you get one you are put into a dilemma. So it’s important to understand these notices, and to figure out what you should do if you get one.

First, you should know that these are used only in Original (fee-for-service) Medicare, and they don’t apply to Medicare Advantage (Medicare managed care, Part C), or even to the prescription drug benefit (Part D).

And you may get one of these notices under three conditions:

(1) Your physician or provider is required to give you the notice because they think that the care you will get will not be paid for by Medicare because it is “not reasonable or necessary” or is “custodial” under Medicare guidelines.

(2) You are required to be given the notice for very technical reasons. The one that should most concern you is that if you are in hospice care and the hospice decides that you are not terminally ill, it has to give you the notice.

(3) Your physician or provider voluntarily gives you this notice because the care you will get is never covered by Medicare (for example, cosmetic surgery).

The first condition is what really needs to be discussed, as the second and third are usually pretty clear cut and Medicare just won’t pay for these. In the first condition, we are talking about a service which Medicare typically covers, but because in a particular situation your physician or provider thinks it is “not reasonable or necessary,” or it constitutes “custodial care.” That is, they think that Medicare won’t pay for it in this particular case. What is going on is that your physician or provider thinks that a service that Medicare may ordinarily cover, for example, a certain lab test, it won’t pay for in this case. Perhaps either national or local guidelines restrict the number of times you can have this test, or they prescribe how often you can have this test, or your physician or provider has had the test denied under circumstances similar to yours, or they had some other reason to think Medicare won’t pay for it.

So they have to protect you by giving this notice. But what it really does is to protect them, because if they go ahead with the procedure without notifying you, Medicare will deny payment, but your physician or provider will NOT be allowed to collect anything from you. But it they do give you the notice, and go ahead with the procedure, they CAN collect from you.

You may also hear the term “limitation of liability” in discussions on Advance Beneficiary Notices of Noncoverage. If you get the notice and the procedure, your liability is increased, but your physician’s or provider’s liability is decreased. And if you don’t get the notice, but do get the procedure, it’s the opposite, your physician’s or provider’s liability is increased, but yours is limited.

And what the notice does is to tell you that probably Medicare won’t pay, and it will ask you to make a choice, and to sign the notice showing that you made a choice. The three choices are:

1. To go ahead with the procedure, but to also have the physician or provider bill Medicare, knowing that it probably won’t pay. This shifts the liability to you.

2. To go ahead with the procedure, but telling your physician or provider NOT to bill Medicare. This also shifts the liability to you.

3. Not have the procedure at all. There is no liability.

The middle option is not a good one, as there is no reason not to bill Medicare, maybe they will pay. So your real choice is to either to (1) go ahead if you think the procedure is really necessary and if you can afford it on you own, or (2) not to get it at all. Not an easy choice.

If you opt for number 1, you will get the procedure and your physician or provider will probably want you to pay them up front, and this is perfectly acceptable. But they will also send a claim to their Medicare Administrative Contractor (MAC). It will always deny these claims when first submitted, and it will also send you a Medicare Summary Notice (MSN) showing the denial. (You won’t have to wait forever to get this as you do for claims that get paid.) You must appeal these denials to have any chance of being paid, but it is easy to do this, and the instructions on how to do it will be on the Medicare Summary Notice. There is no reason not to appeal.

In fact there are two good reasons to appeal. One is that Medicare possibly may find that in your particular circumstances that they should pay for the procedure. If they do, your physician or provider is required to refund what you paid (less any coinsurance or deductible you owe). And while the rules are complicated, they must make this refund promptly. (If they don’t, call 1-800-MEDICARE and ask them to put you in touch with the Medicare Administrative Contractor, or call your Centers for Medicare & Medicaid Regional Office, their numbers are in the CD that comes with the book).

And the other possibility is that the Advance Beneficiary Notice of Noncoverage you got was “defective.” The rules on what has to be in one of these notices and how the notice must be completed are quite strict and very exacting. So if your physician or provider didn’t rigorously adhere to these, your notice may be defective, and it’s as if you were not given notice at all, and the liability shifts back to your physician or provider. So when you make your appeal, be sure to enclose a copy of your notice (your physician or provider MUST give you a copy of it when they notify you) with your appeal and ask the Medicare Administrative Contractor to look at it too.

And know that you can’t given an Advance Beneficiary Notice of Noncoverage when you are in “great duress.” Because the limitation on liability concept shifts the liability from a physician or provider to a beneficiary, you must be able to make an informed, rational health consumer’s choice whether to not receive the service or to accepting it and paying out-of-pocket for it. According to Medicare policy, this decision cannot be done when you is experiencing a medical emergency or in “other compelling coercive circumstances.” Thus, they can never be used in emergency or urgent care situations.

Oh, you may get a different form, the “Notice of Exclusions from Medicare Benefits (NEMB),” Form CMS-20007, when your physician or provider voluntarily gives you notice that a service is noncovered, that is, under condition 3, above, and not the newly revised Advance Beneficiary Notice of Noncoverage. While this “Notice of Exclusion...” form is now obsolete, this is not improper as these notices are voluntary and so don’t shift liability as you are always liable for these services whether or not you get any notice.

The whole issue of Advance Beneficiary Notices of Noncoverage is far more complicated than I have laid out here. Medicare has an entire chapter in one of its manuals dedicated to it, as well additional guidance in other manuals and references. Just as an example, if you are receiving hospice services, or therapy from a Comprehensive Outpatient Rehabilitation Facility (CORF), and your care is completely ended, your provider has to give you an “Expedited Determination” notice so you can make an immediate appeal to your Quality Improvement Organization (QIO), and, if you have your provider continue with your care, it ALSO has to give you an Advance Beneficiary Notice of Noncoverage!

So perhaps a good piece of advice is that, if you get one, and you really can’t quite understand what it all means, you should call your State Health Insurance Counseling Program (SHIP) and talk to a counselor, and they maybe able to help you sort through your options. Their numbers are also on the book’s CD, and the one for your state is on the back of the “Medicare & You” booklet you get every year.

Keywords: Advance Beneficiary Notice of Noncoverage Limitation of Liability Medicare Appeals

Originally Posted 09-23-11