PT/OT Use of Advanced Beneficiary Notice of Noncoverage (ABN)

The following is an explanation of when you can and cannot use an ABN for outpatient physical and occupational therapy patients.[1]

Therapists are required to issue an ABN to Medicare patients prior to providing therapy that is not medically necessary. For example, if a patient has been receiving PT and has achieved all of her PT goals, but still requests continued PT even though it is no longer medically necessary, you must issue an ABN prior to providing the services that will not be covered by Medicare to hold the patient personally liable for payment.

We often field questions as to whether an ABN should be used in connection with the Medicare therapy cap.  As background, prior to 2013, a Medicare beneficiary was financially liable for therapy services above the cap regardless of whether he or she received an ABN.  CMS encouraged providers to alert Medicare patients to potential financial liability; however, an ABN was not required.  Under these pre-2013 rules, if a provider submitted a claim that he or she believed qualified for a cap exception and that claim was denied because the carrier ultimately determined that the services were not medically necessary, the provider could collect from the patient regardless of whether an ABN was issued.

This is no longer the case.  Now you must issue a valid ABN to a patient before providing services above the cap to hold that patient personally responsible for payment.  However, you are faced with a “Catch-22” situation in that if you believe that services above the cap are medically necessary, you cannot issue an ABN to the patient because an ABN can only be used in connection with services that you determine are not medically necessary. CMS has expressly stated that providers should not issue an ABN to all Medicare patients who receive services that exceed the cap.  In other words, you can no longer issue an ABN to a patient on a back-up basis to allow collection from the patient if the carrier determines that the services were not medically necessary and denies payment.

If you issue an ABN to a patient for therapy services above the cap because the services are not medically necessary, a GA modifier should be attached to the claim. If you did not issue an ABN for these services, the GA modifier cannot be added to any claim and you cannot collect from the patient.

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[1] CMS, Therapy Caps and Advanced Beneficiary Notice of Noncoverage (ABN), Form CMS-R-131, FAQs April 2013 (hereinafter, “ABN FAQs”) (http://www.cms.gov/Medicare/Billing/TherapyServices/Downloads/ABN-Noncoverage-FAQ.pdf, accessed 3/23/15).

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