New ABN memo clarifies coverage

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Saturday, August 31, 2002

BALTIMORE – A recently issued memo from the Centers for Medicare & Medicaid Services that offers new details about the advanced beneficiary notice is generating a positive response from the HME industry.

By spelling out conditions where ABNs are warranted, offering specific reasons for coverage denial predictions and standardizing the rules for durable medical equipment regional carriers, industry observers believe the July 31 memo may pave the way for more beneficiaries to take advantage of upgrades.

"Clarifying why beneficiaries get ABNs should alleviate some of the concerns people have had," said Asela Cuervo, senior v.p. and general counsel for AAHomecare. "Where this has a big impact is on being able to tell beneficiaries explicitly that they don't qualify for coverage 'because of XYZ' — that is fleshed out much better."

Under a memo section called "Reason for Predicting Denial," CMS maintains that simply stating "medically unnecessary" is not a sufficient reason for using an ABN. Instead, suppliers (and physicians) "must give the beneficiary a reasonable idea [for] predicting the likelihood of Medicare denial so the beneficiary can make an informed consumer decision whether or not to receive the service or pay for it personally."

According to the memo, there is a customizable "Because" box on the ABN, which lists reasons why a claim may be denied. Explanations for predicting coverage denial include:

4 "Medicare does not pay for this item or service more than [frequency limit]."

4 "Medicare does not pay for services which it considers to be experimental or for research use."

4 "Medicare does not pay for this item or service for your condition."

Addressed to program intermediaries and carriers, the CMS memo should result in more consistency between the DMERCs with regard to ABNs, Cuervo said.

"These instructions resolve the rules — they are explicit about when notice is to be given, what needs to be in it to be effective and the good news is that it is required across the board for all DMERCs," she said. "We have asked all along that the DMERCs follow the same rules. By clarifying these pieces, there should be no carrier second-guessing."

Even with the CMS clarifications, however, provider Vince DeStigter says he remains skeptical of the ABN concept.

"I just don't see why we need them — they're cumbersome and shouldn't have to be used," said DeStigter, CEO of Jackson, Calif.-based Western Health-care. "The government is telling patients that they can't manage their own lives." HME

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