Observation Deck: The Correct Usage of ABNs

Advanced beneficiary notices can help address dreaded cash flow problems.

An advanced beneficiary notice (ABN) can be used to help you grow your business if used appropriately. The ABN must be verbally reviewed with the beneficiary or his or her representative, and must follow the new CMS R-131 format. This is a notice that you are giving to explain what exactly is going to happen regarding the decision the patient makes about the coverage of an item he or she want in regards to his or her financial responsibilities.

The first part is basically patient information that includes the patient name and identification number, as well as a statement that essentially says “If Medicare doesn’t pay for ____ below, you might have to pay.” The ABN can be used for assigned or non-assigned claims. It must fully explain to the patient the out-of-pocket expenses (estimated cost), and the reason that Medicare might not pay.

This should not be any kind of checklist, but basically a sentence stating Medicare might not pay for, say, the scooter a patient wants because Medicare only pays for what is needed within the home. The patient then has three options:

•    “I want the ____.”

•    “I want the ____, but do not bill Medicare.”

•    “I don’t want the ____ listed above.”

The problem with the rest of the wording with this form is that within option one it states “If Medicare does pay, you will refund any payments I made to you, less co-pays or deductibles.” The problem with this is that that the provider would not be collecting anything from the patient except co-pays and deductibles on an assigned basis and on a non-assigned basis the payment would go to the beneficiary. So why this is worded in this way does not appear to be logical?

The one good thing is that we now have the patient signing that he or she does not want to have Medicare billed, but does that mean that if he or she comes back three or four weeks later that the provider will have to bill? Not legally if there is a signed ABN, but most of us will do so any way.

Now as for billing, when billing for an item as a “free” upgrade you would simply bill one line using the item the patient meets criteria for and add the GL modifier. For example, a patient meets criteria for a semi-electric hospital bed, but the provider only keeps fully electric hospital beds in stock. Just bill E0260 as usual, but add the GL modifier, E0260RRKHGLKX, to it. When billing for a beneficiary-requested upgrade the provider would bill the first line for the upgraded item with the GA modifier, and this would deny E0265RRKHGA. Then bill the second line with the GK modifier, E0260RRKHGKKX. (The KX is also required on hospital beds so it would be placed after the GK.)

When doing this assigned, the provider would bill the patient up-front for the difference between the charge for the upgraded item and the standard item, plus any unmet deductible and 20 percent co-pay of the standard item. Note, the deductible amount can’t be more than you charge amount. This would relate to how much of their deductible has been met already.

You can also bill an upgrade within the same code as long as the item can still fit within the home environment. For example, K0800NUGA for a standard POV, and K0800NUGKKX for an upgraded POV, because the patient wants features that are not standard (the KX is required on POVs/scooters).

Even if the physician orders an upgraded item, the provider would still need the ABN in order to collect up-front for non-assigned, or the upgraded amount for an assigned claim.

When using an ABN to indicate a possible Medical Necessity denial, a provider must use the GA modifier to indicate that it has a valid ABN on file. This enable the provider to receive the patient responsibility denial and can then collect the 80 percent of the allowed amount on assigned claims. The provider would have already collected the 20 percent, or would bill the secondary.

The GK modifier is always used to indicate the item for which the patient meets criteria. It helps to remember that GA is “want” and GK is “need.” The GY modifier is not use in addition to a GA modifier. The GY modifier is used to indicate that the item is non-covered and is supposed to still give you the PR or patient responsibility denial. Sometimes this is used to indicate when a backup item is being billed in order to go to a secondary payor source.

For example, using the GY with a power chair because the patient meets criteria for a manual chair, but another payor source will pay for the power, the provider would still use all other modifiers, NUBPKHGY.

If using an AB adds extra modifiers, and more than four modifiers would be required on the claim, then the provider would use an overflow modifier. This would be the KB which tells the DMEMAC that it could not get all the modifiers on the claim and will need to add them to the narrative field on an electronic claim.

For example, billing for a power wheelchair replacement that is an upgraded PWC, but the patient meets criteria for a standard PWC, and you are doing a free upgrade, then it would be K0823NUBPKHKB — NU for new; BP for bene purchase; KH for first month and KB means overflow modifier. The provider adds the RA for replacement base, GL for free upgrade, and KX for meets criteria. The patient is getting a K0831 because this is what he or she had, but actually meets criteria for a K0823. The provider has a K0831 in stock that it will provide as a free upgrade.

Remember that modifiers let claims be processed without anyone looking at them. Adding the KB means that someone will have to ensure the other modifiers are in the system in order for payment.

ABNs should not be used for every item, but for items that are frequently denied as duplicates. If you have a high duplicate denial rate for supplies because of other insurer (home health), or just duplicates because you could not find out when the last item was provided, it is alright to use the GA modifier on these duplicate denials.

Making sure your staff understands how to correctly use ABNs will help increase cash flow.

This article originally appeared in the March 2009 issue of HME Business.

About the Author

Peggy Walker, RN, is billing & reimbursement advisor for the U.S. Rehab Division of VGM Group and can be contacted via phone at 803-754-2090.

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