Understanding “Medical Necessity” Billing
By Patricia A. Trites; PhD, MPA, CHBC, CMP™ (Hon)
Some doctors, healthcare executives and/or their insurance or billing advisors do not realize that just because an item or service is not “medically necessary” for billing purposes (in other words, a payable diagnosis); that same item or service may be perfectly necessary for the health or welfare of the patient.
This is where Advance Beneficiary Notices (ABNs) can save the medical practice or healthcare organization much time and money in the billing process.
Defining the ABN
Advance Beneficiary Notices [ABNs] are statements that are given to the patient to read and sign whenever a provider believes that the item or service may not be covered (paid) by Medicare.
Reasons for Use
This may occur when there are a limited number of services that can be performed in a specific time frame, such as, mammography, PSA, colonoscopy, etc.
It can also be used when a patient insists on a specific treatment or test, even when the physician believes the service is unwarranted or unnecessary, but understands that failing to provide the service may put him/her at risk under professional liability standards.
Risk Transfer Mechanism
When an Advance Beneficiary Notice has been signed by the patient, it removes the risk of non-payment from the provider.But, Advance Beneficiary Notices cannot be given to every patient or for all procedures or services.
Assessment
There must be a reasonable expectation that payment will be denied because there is a lack of medical necessity (for billing/ payment). To access complete instructions for the use of ABNs and copies of the specific form that must be used for Medicare patients, go to https://www.cms.gov/
Conclusion:
What has been your experience with ABNs, as a medical provider and/or healthcare executive?
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