Everything You Need to Know About the Medicare ABN Form

Facing an unexpected medical bill can be stressful. The Medicare Advance Beneficiary Notice (ABN) is designed to prevent such surprises. If you’re a Medicare beneficiary, understanding the ABN—or Advance Beneficiary Notice—is key to anticipating potential out-of-pocket costs for services Medicare might not cover or in this situation may deny payment. In this article, we’ll unpack when an ABN is required, how to interpret and complete the form, and how it impacts your financial responsibilities, without inundating you with jargon or unnecessary details.

Key Takeaways

  • The Medicare Advance Beneficiary Notice (Form CMS-R-131) is used by healthcare providers to inform beneficiaries of potential out-of-pocket expenses for services that Medicare may not cover due to issues such as medical necessity or frequency limitations.

  • Healthcare providers must complete several mandatory fields on the ABN form, including providing a ‘good faith’ cost estimate and retaining the signed form for a minimum of 5 years to ensure compliance with Medicare regulations.

  • Beneficiaries must be aware of their rights and implications of signing the Advance Beneficiary Notice, which includes decisions on whether to accept financial responsibility, pay without involving Medicare, or decline the services offered, with each choice affecting billing and their ability to appeal Medicare’s decisions.

Understanding the Medicare ABN Form

Medicare ABN Form

Venturing into the Medicare terrain can be daunting, particularly when faced with unfamiliar jargon such as ‘ABN form.’ What is it, exactly? Well, the ABN form, also known as Form CMS-R-131, is a protective mechanism for Medicare providers and an informative tool for beneficiaries. Its primary function is to transfer potential financial responsibility from the provider to the patient for services that Medicare might not cover due to insufficient medical necessity. It also alerts the Medicare beneficiary that Medicare may deny payment for this service or procedure.

The Purpose of the ABN

The ABN form serves to forewarn a Medicare beneficiary that although Medicare may cover a specific service or procedure, there are reasons to believe Medicare may deny payment in this specific instance. The Advance Beneficiary Notice alerts and informs the patient before such charges are incurred. The Advance Beneficiary Notice is written notice that provides a cost estimate if Medicare denies payment.

The Medicare Advance Beneficiary Notice form brings transparency to the forefront, enabling patients to understand the potential costs they may have to bear and make informed decisions accordingly. After all, knowledge is power, especially when it comes to your health and wallet.

When Is an ABN Required?

Having grasped the purpose of the Advance Beneficiary Notice, the ensuing pertinent question is: Under what circumstances is an ABN form required? The answer lies in the realm of medical necessity and frequency limitations. An ABN form is required when a physician or healthcare provider believes that Medicare may not cover a specific item or service in certain instances.

Medicare leans on your doctor to determine medical necessity by evaluating whether the services or items are reasonable and essential for diagnosing or treating an illness or injury. Additionally, Medicare coverage of preventive care has frequency restrictions on specific preventive care medical services. If beneficiaries surpass these limitations, an ABN form comes into play to notify them of potential out-of-pocket expenses.

The benefit is that the Advance Beneficiary Notice provides a written notice that forewarns a patient before Medicare denies payment. It protects the provider financially so they may provide coverage before the official decision of coverage from Medicare.

Key Updates to the Advance Beneficiary Notice

Much like the healthcare sector, the Advance Beneficiary Notice is dynamic. It adapts to accommodate evolving requirements and modifications within the industry. The next update to the Medicare Advance Beneficiary Notice form is projected to occur no earlier than January 2026, with the expiration date changed to January 31, 2026. This update is a result of the form’s renewal by the Office of Management and Budget (OMB).

The official updating process involves an approval by the OMB. The Advance Beneficiary Notice, officially known as Form CMS-R-131, and its instructions, are renewed periodically to reflect necessary changes. This ensures that the form remains current and relevant, aligning with the evolving needs of Medicare beneficiaries and providers.

Completing the ABN: A Step-by-Step Process

Having demystified the purpose, requirement, and updates of the ABN form, it’s time to explore the procedure for filling it out. This step is crucial as a properly filled out ABN form is essential for its validity and effectiveness. Guidance for completing the ABN form can be obtained from the ABN form instructions provided by CMS, offering a comprehensive understanding of the process.

The Advance Beneficiary Notice mandates the filling out of seven particular fields, crucial in ensuring the form’s validity and efficacy. Among these steps, ensuring accuracy in the cost estimate is of paramount importance. Providers must provide a ‘good faith’ estimate that accurately reflects the potential liability for the patient. The estimate should not exceed $100 or 25% deviation from the actual costs, whichever amount is greater.

Accurate Estimated Costs

The issue of precise cost estimation holds significant importance in the ABN form. Precise cost estimations must comply with the requirement that they should not exceed $100 or 25% of the actual costs, whichever is greater. This promotes transparency and enables beneficiaries to make informed decisions. However, the consequences of inaccurate cost estimations can be severe, leading to Medicare investigations, potential financial responsibility for the provider if claims are rejected, a detrimental effect on revenue, and diminished patient satisfaction.

Providers can determine precise estimated costs for Medicare services by utilizing the Medicare Fee Schedule Rates or consulting the official Medicare.gov website.

Mandatory Fields to Be Filled

The ABN form doesn’t solely center around accurate cost estimation. It includes mandatory fields which must be completed to validate the form. These include all Blank (D) fields and the Reason Medicare May Not Pay field (Blank (E)).

Failure to complete these mandatory fields could lead to potential liability for the provider for the services or items in question, along with financial repercussions and the possibility of Medicare investigations. So, crossing every ‘t’ and dotting every ‘i’ on the ABN form is vital for both providers and beneficiaries.

Record Retention

Completing the ABN form is one part of the equation; retaining it is another. According to Medicare regulation, the signed ABN must be kept for a duration of 5 years from the discharge date or the completion of care delivery. This is crucial to ensure compliance with state record retention regulations, considering the Protected Health Information (PHI) contained in the ABN.

Failure to retain ABN form records for the mandated ten-year period may lead to non-compliance with CMS guidelines, as outlined in the CMS Manual Instructions for the ABN Form. Hence, healthcare providers must securely store ABN forms to comply with these regulations, and specific guidelines exist for electronic storage.

Making Informed Choices: Implications of Signing the ABN

Upon endorsing the ABN, beneficiaries are offered three potential options:

  1. Consenting to receive the service and possibly being invoiced by Medicare

  2. Paying directly for the service without involving Medicare billing

  3. Refusing the service outright

Each of these options carries its own implications in terms of billing, payment, and appeal rights for the extended course, as well as the need to transfer potential financial liability.

The choice made by the Medicare beneficiary can significantly influence their financial responsibilities, their ability to appeal Medicare’s decisions, and even the delivery of the service. This makes it all the more important to understand the implications of each choice.

Option 1: Agreeing to Pay and Requesting Medicare Billing

Option 1 involves the beneficiary agreeing to receive the service, accepting financial responsibility if Original Medicare does not pay, and requesting the provider to bill Medicare. This option enables the beneficiary to maintain the right to appeal Medicare’s payment decisions, as the service has been provided and billed to Medicare.

However, opting for option 1 also entails the beneficiary’s agreement to assume financial responsibility in the event that Medicare does not provide coverage. This option allows beneficiaries to retain their right to appeal, providing a mechanism to contest the decision if Medicare denies payment.

Option 2: Paying Without Medicare Billing

Option 2, on the other hand, involves beneficiaries paying directly for the service without involving Medicare billing. This option may be most appropriate when a Medicare item or service is not deemed reasonable and necessary according to Program standards, or for any services not covered by Medicare under any circumstances.

By opting for option 2, beneficiaries may encounter charges from opt-out providers, as these services are not covered by Medicare. Consequently, the patient is accountable for the full cost of the service. However, this option does not affect a patient’s appeal rights. If Medicare denies payment for a claim, patients still maintain the right to pursue an appeal.

Option 3: Refusing the Service

Option 3 presents a different path. By declining the service, the healthcare provider will not perform the service, and the beneficiary will have no payment obligation. This option allows beneficiaries to avoid potential charges altogether and effectively deny payment.

We only recommend this option if you are certain your Medicare coverage does not include this service, or the cost of such service is beyond your budget.

However, by declining the service, beneficiaries waive their rights to appeal Medicare’s decision regarding payment for the services or items they are declining. The decision to refuse a service should therefore be made after careful consideration of the potential financial and health implications.

Medical Necessity and Medicare Coverage

In the context of Medicare, the notion of ‘medical necessity’ carries substantial importance. Medicare defines medically necessary services or supplies as essential healthcare services and supplies required for the diagnosis and treatment of illnesses, injuries, or conditions. This definition plays a pivotal role in determining Medicare’s coverage decisions.

So, how does this tie in with the ABN form? An ABN form is used when a service or procedure may not be covered by Medicare due to a lack of medical necessity. In other words, it provides a safety net for both providers and beneficiaries when there is uncertainty about the medical necessity of a service or procedure their Medicare coverage is expected to pay.

Appealing Medicare Decisions

Sometimes, beneficiaries may disagree with the Medicare coverage decision. In such cases, they have the right to contest the decision through the appeal process. The initial step to initiate the appeal process is to follow the guidelines outlined in their Medicare Summary Notice (MSN). If a beneficiary chooses to appeal, they must submit the Redetermination Request Form to the Medicare Administrative Contractor within 120 days from the date indicated on their MSN.

The appeal process is structured into five levels, each offering an opportunity to contest Medicare’s decision. During this process, beneficiaries may need to provide supporting documents such as peer-reviewed evidence-based medical information. This underscores the importance of being well-informed and proactive about one’s healthcare decisions.

Frequently Overlooked Aspects of the ABN Form

As we delve into the intricacies of the ABN form, certain facets may frequently be disregarded. These include the voluntary usage of the ABN form, its impact on skilled nursing facilities, and the possibility of using a single ABN for multiple services.

Understanding these nuances can provide a more comprehensive view of the ABN form and its implications. It highlights the flexibility of the ABN form and its wider impact on different healthcare settings, ensuring that beneficiaries are well-equipped to navigate their Medicare journey.

Voluntary ABN Usage

One such often-neglected facet is the voluntary usage of the ABN form. It refers to the decision to issue an ABN despite it not being mandatory according to Medicare regulations. This voluntary usage can be beneficial for beneficiaries, providing them with information about services that may not be covered by Medicare.

However, voluntary ABN usage also carries potential disadvantages such as facing consequences like Medicare investigations and financial liability for denied claims. Hence, understanding when to use the ABN form voluntarily can be crucial in navigating potential challenges.

Impact on Skilled Nursing Facilities

The ABN form can notably influence the operations of skilled nursing facilities (SNFs). SNFs use the ABN form to shift financial responsibility for Part B items and services. This process involves specific guidelines that SNFs must adhere to, ensuring that beneficiaries are properly informed about their potential financial obligations.

Improper use of the ABN form can lead to potential consequences for SNFs, including being held accountable for the services or items in question. Understanding the proper use of the ABN form is therefore important not just for individual beneficiaries, but also for healthcare providers at large.

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Single ABN for Multiple Services

Yet another frequently missed detail of the ABN form is the potential to utilize a single ABN for several services. Medicare permits the use of a single ABN form for multiple services when items or services are routinely grouped together. This can simplify the process for both providers and beneficiaries, streamlining the bundling of services into a single cost.

However, there are circumstances where a single ABN cannot be used for multiple services, such as when the service does not meet the reasonable and necessary criteria under Medicare standards. Hence, it’s crucial to understand these nuances to ensure compliance with Medicare guidelines.


In conclusion, the Medicare Advance Beneficiary Notice (ABN) is a vital tool in the healthcare process, providing a safety net for providers and a compass for beneficiaries. From understanding its purpose and usage to completing it properly and making informed choices, the ABN form requires careful attention and understanding. Overlooking any aspect of the ABN form could lead to potential consequences, underscoring the importance of being well-informed and proactive in our healthcare decisions. So whether you’re a provider or a beneficiary, remember – when it comes to the ABN form, knowledge is power.

Frequently Asked Questions

What is a Medicare ABN form?

The Medicare Advance Beneficiary Notice, also known as an Advance Beneficiary Notice (ABN) or waiver of liability, is a notice that a provider gives before a service if they believe Medicare may not cover it, listing the services, estimated costs, and reasons for potential non-payment. This form is important for informing Medicare beneficiaries of potential costs and non-coverage situations.

What is the new ABN form for 2023?

The new Advance Beneficiary Notice of Noncoverage (ABN), Form CMS-R-131, must be used by June 30, 2023, as it has been approved for renewal by the OMB with an expiration date of 01/31/2026.

Can you bill a Medicare patient without an ABN?

You cannot bill a Medicare patient directly without an ABN. The ABN must be given to the patient prior to any provided service or procedure. Without a signed ABN, you cannot bill the patient directly and the service must be written off if denied by Medicare.

Who uses an ABN form?

An ABN form is used by providers, physicians, practitioners, and suppliers when providing services to Original Medicare (fee for service – FFS) beneficiaries. It is not required for Medicare Part C and Part D services.

When is an ABN form necessary?

An ABN form is necessary when a healthcare provider suspects that Medicare may not cover a particular item or service. This helps inform the patient of their potential responsibility.

Matthew Claassen, CMT and CEO of Medigap Seminars Insurance Agency. Medigap Seminars is an award winning premier national Medicare Insurance Brokerage, ranked among the top in the U.S.A. Matthew is considered a leading national expert on Medicare and Social Security. Mr. Claassen is a distinguished member of the Forbes Business council, an invitation only organization of business leaders and entrepreneurs. He and his team have received awards from many of the countries largest insurance companies including Mutual of Omaha, Aetna, Humana, Cigna, United American, United Healthcare and others. His videos have become the most popular Medicare educational videos on YouTube with millions of views. As a financial analyst Matthew lead a team of researchers to win the 2009 Best Equity Research & Strategy Award from The Technical analysis magazine.


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