What Is an Advance Beneficiary Notice?

Medicare doesn’t cover all medical bills.

Health providers issue an advance beneficiary notice of noncoverage (ABN) when they believe Medicare won’t cover medical bills for its beneficiaries. These notices state the reasons Medicare may decline the claim and an estimate of the costs the person may pay for their treatment.

Here's what you need to know about ABNs so that you can make informed decisions about your health coverage moving forward.

Who Uses Advance Beneficiary Notices?

Health providers use ABNs to make their patients financially responsible for treatments Medicare may decline.

All health providers participating in Original Medicare use ABNs, including:

Hospitals
Doctor’s offices
Specialist medical clinics, such as chiropractor’s offices
Medical centers
Healthcare laboratories
Home health agencies
Hospices

When Should Health Providers Issue an ABN?

Health providers issue ABNs before providing someone with treatment that Medicare is unlikely to cover. It may occur at the following times:

Before any treatment begins: This may be when a provider accepts a new patient whose best treatment option isn’t covered by Medicare or when an existing patient begins a new treatment.
When care reduces: Sometimes, when a person’s care is reduced, for example, less frequent or shorter duration treatments, and the beneficiary wants to continue with the care that Medicare deems unnecessary, the provider may issue an ABN.
When Medicare no longer covers treatment: If Medicare removes services or items from its coverage list, the beneficiary receives an ABN.

Why Is an ABN Important to Patients?

ABNs are important to patients because they inform them that Medicare may not cover their treatments. They have the option to approve or decline the medical care with a complete understanding of the financial impact of their decision. These notices ensure people don’t face the surprise of an unexpected bill if Medicare denies their claims.

People who sign an ABN may also have the right to appeal the Medicare decision if it denies their claim. Filing an appeal can be a way to recoup the costs paid for medical treatments listed on the ABN. However, if patients don’t receive an ABN, they cannot file an appeal.

Who Cannot Present the ABN?

Health providers cannot present an ABN to their patients unless they reasonably believe that Medicare will deny a claim for a service or item they recommend. They are not routine documents.

They also can’t present ABNs to make patients liable for treatment in the following circumstances:

When they are facing medical emergencies or under other significant stress
When their treatment is part of a bundled service paid for by Medicare
When the provider gets Medically Unlikely Edit (MUE) denials
When they know Medicare will pay for the service

What Should You Do If You Receive An ABN?

If you receive an ABN, you have the following three options:

Approve the treatment and ask your provider to submit a Medicare claim: You may need to pay for treatment when you submit your ABN, but Medicare may reimburse your funds (minus any deductibles) if it approves your claim. Alternatively, your provider may allow deferred payment until Medicare makes its decision. If you choose this option, you can appeal if Medicare rejects your claim.
Approve the treatment without billing Medicare: You may need to pay for your treatment now or organize a later payment with your provider. As there is no Medicare claim, you can’t appeal.
Decline the treatment: As there is no treatment, you are under no obligation to pay the amount listed on the ABN.

Tick the box that corresponds to your choice. You should consider your budget and your health provider’s recommendations about the treatment and your condition before making your decision. Sign the ABN to show you understand the document and your options, then submit it to your health provider.

An ABN Protects You From Unforeseen Medical Expenses

Receiving an ABN can be unsettling, but the document serves to protect you from expenses later that you may not have budgeted for.

Remember that you’re free to accept or decline the treatment recommended for you. An ABN allows you to make decisions about your medical care while understanding the costs that could result in the event Medicare doesn’t approve your claim.