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How should an Advanced Beneficiary Notice form be used?


The best way to answer that question to look to some guidance issued by the DMERC during a question and answer session about the ABN form:

QUESTION What is the mechanism for upgrading from one HCPCS code to another HCPCS code?

An ABN for upgrade can be used when a beneficiary chooses a higher level of service not prescribed by the treating physician.

QUESTION Are all DMEPOS products eligible to be used in upgrade situation (e.g., oxygen conserving devices)?

DMEPOS items that offer a component that the standard item does not have are eligible for upgrade. Oxygen conserving devices are included in the monthly oxygen allowance.

QUESTION Is an upgrade from a manual wheelchair to a power wheelchair or POV considered an appropriate use of an ABN with upgrade?

Yes. The beneficiary may upgrade to a power wheelchair or POV as long as the treating physician does not oppose the use.

QUESTION How is an upgrade within a HCPCS code accomplished and when is it appropriate? How does medical necessity play a role in this? We have four examples of questions concerning this:

a. A "traditional" CPAP is tolerated well by the Medicare patient but he wants an "auto-CPAP" device because his daughter is an RRT and he is aware of the latest technology. The physician sees no harm in the patient using an auto-CPAP. Can the patient pay the difference between the regular CPAP and the auto-CPAP price?

b. The Medicare patient wants a nasal mask and a nasal-oral mask (which costs more) in order to rotate masks but, there is no medical necessity for the nasal-oral mask, the patient just wants one. Can the patient pay for the additional mask?

c. The least costly nasal mask is working fine but the Medicare patient heard about the gel mask and wants one. Can the supplier upgrade the patient and charge them more than the least costly mask since the new technology mask costs more?

d. The Medicare patient prefers the high tech volume ventilator that provides pressure support ventilation as well but a PLV ventilator meets medical necessity. Can the patient be asked to pay the difference between the "traditional" volume ventilator and the new high technology volume ventilator?

a. - d. Per CMS, ABNs may not be used to charge beneficiaries more for “higher quality” items when there is not a distinguishable excess component of the items. An upgrade can be provided if the item provides an excess component that the standard item does not have. An excess component, with respect to items that are more expensive, refers to increased charges attributable to furnishing something that is clearly more extensive – that is more in number, more frequent, for a longer period of time, or with added features. A deluxe or aesthetic feature of an upgraded item is an excess component. It does not suffice merely to claim that an item is “better” or “higher quality.”

QUESTION What is the upgrade amount that gets billed to the beneficiary – is it the difference between the allowed amount and the retail charge for the upgrade (plus co-payments, etc.), or is it the difference between the retail price for the standard item and the upgrade (plus co-payments based on the allowed amount)?

The amount suppliers may collect from the beneficiary is the difference between the submitted charge for the upgrade item and the submitted charge for the standard item ordered by the physician plus any co-pay and deductible.

QUESTION The CMS document directs carriers to require charges for the standard/upgrade on the HCFA-1500 form, but is not clear about how to handle the transaction from the beneficiary end. It is also not clear what a standard item is. Most suppliers choose an item that is standard for its business, but those items vary by supplier and there is no statutory or regulatory definition of what is “standard.” A key here is a provider knowing what needs to be programmed into the supplier’s computer system when producing the HCFA-1500 form.

Standard equipment equals equipment prescribed by the physician. You should follow the same guidelines you used prior to ABNs for upgrades for determining what is standard equipment.

QUESTION If the beneficiary is found to be not liable for some reason or does not pay as agreed, can the provider pick up the equipment?

If the beneficiary signs the ABN for upgrade accepting liability, s/he is responsible for payment. Failure to make payment can result in the supplier picking up the upgrade item and providing the non-upgraded item prescribed by the treating physician.

QUESTION For beneficiaries who routinely use more supplies than permitted by the frequency limits (e.g. urologicals), must the supplier get an ABN signed every time the beneficiary gets supplies or only when they exceed the monthly supply limit?

No. Once obtained, the ABN is valid for future services for that item.

QUESTION Can a supplier provide an upgrade covered item without billing the patient? How does a supplier submit this type of claim to Medicare? Does this scenario change for a non-covered item?

Suppliers may provide free upgrades to beneficiaries. For example, some suppliers only stock K0004 wheelchairs. They may file a claim for the medically necessary item (K0001) with the GL modifier (e.g., K0001RRKHGL). The item that was actually provided to the beneficiary must be described in Item 19 on the HCFA-1500 claim form.

ABNs do not apply to non-covered items.

QUESTION Regarding the upgrade option on a capped rental item: Can the provider accept the difference in the amount for the full capped rental period in the first month or do they have to bill the patient each month for the difference?

Suppliers must file claims for the upgraded item according to the billing instructions for the standard item prescribed by the treating physician. For capped rental items, you should bill on a monthly basis.

QUESTION If a supplier provides the patient with the upgrade, does he submit the claim using the upgrade piece of equipment HCPCS code or does he file using the HCPCS code for equipment that the patient qualifies for?

Both items must be listed on the HCFA-1500 claim form indicating the submitted charges for each item. The upgrade item is filed on line one with the GA modifier and the standard item is filed on line two with the GK modifier. The following is an example:

Upgrade item K0004RRKHGA $100.00 (submitted charge)
Prescribed item K0001RRKHGK $ 50.00 (submitted charge)
Claim total $150.00

QUESTION Are the charges the difference between the upgrade equipment and the allowed amount or should a provider file the retail amount for the equipment that is ordered by the physician?

The amount suppliers may collect from the beneficiary is the difference between the submitted charge for the upgrade item and the submitted charge for the standard item ordered by the physician plus any co-pay and deductible.

QUESTION Is the submitted price on the upgrade item our customary charge or the Medicare allowed amount?

The submitted price is your customary charge for the upgrade item.

QUESTION Is a provider required to bill the upgrade as a non-assigned claim and the ordered equipment as an assigned claim?

Assignment is on a claim by claim basis and both items must be listed on the same HCFA-1500 claim form indicating the submitted charges for each item. The upgrade item is filed on line one with the GA modifier and the standard item is filed on line two with the GK modifier.

QUESTION If the supplier has provided an upgrade to a beneficiary (prior to the new policy being released by the DMERC) is the supplier required to include the modifiers with the claims?

If the beneficiary chose an upgrade item, it must be indicated to Medicare. If an ABN for upgrade was signed and claims were previously filed without reflecting the upgrade, you should request a review to have the claim correctly indicate an upgrade was provided. We recommend sending a copy of the ABN with your review request. Subsequent claims must be filed accurately reflecting the upgrade and using the appropriate modifiers.

QUESTION What equipment is required to be on the CMN? The equipment the patient wants or the equipment they qualify for?

a. A CMN is required for the item ordered by the physician.

b. The HCPCS code of the ordered item must be included in Section A of the CMN.

c. A description of the ordered item, retail amount and Medicare allowable amount
must be listed in Section C of the CMN

You can download the ABN form by clicking here (pdf file)



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