Traditional Medicare Advance Beneficiary Notices

Beneficiaries or their providers may ask a Medicare administrative contractor about the coverage and cost of certain services and items. Prior-determination requests may be made only for physician services with the highest average allowed charges or plastic and dental surgeries with a Medicare Physician Fee-Schedule amount of $1,000 or more. Many beneficiaries may not be aware of physician charges or their right to prior determinations. 

Most private insurance contracts allow providers and enrollees to obtain prior assurance that a claim will be covered. This is the case for many higher-cost services. But in some circumstances, the health plan may require preauthorization. Medicare does not operate this way. Medicare’s standard for coverage is that care must be deemed “reasonable and necessary.” When providers recommend care for which they believe Medicare might not pay (because it is not deemed reasonable and necessary), they must notify a traditional fee-for-service beneficiary that the service may not be reimbursable. The notice must be given both verbally and in writing. This advance beneficiary notice (ABN) is intended to foster an informed discussion between the doctor and the beneficiary about whether or not to proceed with the service at the beneficiary’s expense. An ABN is not required for services that are categorically excluded from Medicare coverage, such as cosmetic surgery and experimental procedures. 

An ABN is not considered a private contract. Some providers have misused ABNs, asking beneficiaries to sign blanket notices promising payment far in advance without specifying the service. A blanket notice that does not specify the service does not fulfill the purpose of the ABN. It also does not enable a beneficiary to make an informed choice each time a service is recommended.