Using Your ABNs Wisely (and Appropriately)

As we get later into the year and more Medicare beneficiaries are meeting or exceeding their annual therapy cap, I have been fielding a lot of questions regarding the proper use of Advanced Beneficiary Notices (ABNs).  Recent changes pertaining to the use of ABNs for therapy services have seemed to create some confusion among providers.  Prior to January 1, 2013, claims for therapy services at or above therapy caps that did not qualify for a coverage exception were denied as a benefit category denial, and the patient was financially liable for any non-covered services. CMS had encouraged providers to issue a voluntary ABN as a courtesy, but ABN issuance wasn’t required for the patient to be held financially liable.

Now, due to a provision in the American Taxpayer Relief Act of 2012, therapists must issue a valid, mandatory ABN to the patient before providing services above the cap when the therapy coverage exceptions process isn’t applicable.  (Remember that last part because we’re going to circle back to it later.)  If the ABN isn’t issued when it is required and Medicare doesn’t pay the claim, the provider would be liable for the charges.  Keep in mind that therapists are required to issue an ABN to patients before providing therapy that is not medically reasonable and necessary, regardless of the therapy cap.  The statutory changes mentioned above mandate ABN issuance when therapy services are not medically reasonable and necessary and exceed the cap amount.

It is important to understand that the new language shouldn’t be construed as instruction to provide blanket ABNs to patients once they have exceeded the therapy cap (for 2013, $1,900 for PT and speech therapy combined and $1,900 for OT).  Per Medicare, “a notifier should not give an ABN to a beneficiary unless the notifier has some genuine doubt regarding the likelihood of Medicare payment as evidenced by its stated reasons.  Giving ABNs for all claims or items or services (i.e., ‘blanket ABNs’) is not an acceptable practice.  Notice must be given to a beneficiary on the basis of a genuine judgment about the likelihood of Medicare payment for that individual’s claim.”

ABNs should only be issued in instances where the therapist feels the services will not be covered by Medicare.  If a patient has met their cap and the therapist determines that additional care is medically necessary, he/she should support the need for continued services in the documentation.  By appending the KX modifier, the therapist is telling Medicare that while the patient has exceeded the cap, he/she feels additional care is medically necessary and requires the skilled intervention of a therapist.  In this scenario, no ABN is necessary.  If, however, those services were then denied based on medical necessity, the patient could not be billed for those services since no ABN is on file.

Remember that CMS directs therapists to issue an ABN when the therapy coverage exceptions process isn’t applicable or when therapy services are not medically reasonable and necessary.  If the therapist feels that additional care is not warranted or cannot be justified in the documentation, then the therapist should consider discontinuing therapy and recommend an appropriate discharge plan (e.g., continue with a home program, referral back to the patient’s physician, etc.).  If the patient wants to receive care (at ANY point, not just above the cap or threshold) and the therapist does not feel he/she can justify medical necessity for skilled therapeutic intervention, then the patient should be offered an ABN including an explanation of why additional care will, most likely, not be covered.  The financial responsibility would then shift to the patient if the patient signed the ABN.

Therapists should understand that the decision to continue treatment shouldn’t depend on where the patient is in regard to their $1,900 therapy cap or the $3,700 manual medical review threshold.  The therapist should base the decision to continue therapy on the functional deficits of the patient, the need for skilled intervention, and the prognosis of the patient to demonstrate improvement in a reasonable period of time.  Furthermore, the therapist should remember that the purpose of the ABN is to alert the patient to services that the therapist EXPECTS Medicare will not pay for, not to serve as a safety net in the event Medicare DOESN’T pay for those services.  To give a patient an ABN simply because they had reached a certain threshold would not be a proper scenario as it is the equivalent of the therapist telling the patient, “I think you need additional therapy, but I need you to sign this form just in case my documentation isn’t good enough for me to get paid by Medicare.”  It is the therapist’s responsibility to support medical necessity and the need for skilled intervention in the documentation, regardless if the patient has used $400 or $4,000.