Non-covered services do not require an ABN since the services are never covered under Medicare. While not required, the ABN provides an opportunity to communicate with the patient that Medicare does not cover the service and the patient will be responsible for paying for the service. Pre-emptive communication through a voluntary ABN can prevent negative patient perceptions of your practice and facilitate collections. These modifiers are not required by Medicare but do allow for clean claims processing and billing to the patient.
There are two main categories of services which a physician may not be paid by Medicare:
- Services not deemed medically reasonable and necessary
- Non-covered services
In some instances, Medicare rules allow a physician to bill the patient for services in these categories. Understanding these rules and how to use them in your practice increases the likelihood of getting paid for the services your patients need, even if Medicare doesn’t cover them. Other categories of services Medicare does not pay include bundled services and services for which another entity, such as workers’ compensation, are primarily responsible (often referred to as “coordination of benefits”).
Some of the items and services Medicare doesn’t cover include Long-term care (also called custodial care); Most dental care; Eye exams related to prescribing glasses; Dentures; Cosmetic surgery; Acupuncture; Hearing aids and exams for fitting them; and Routine foot care.
Certain services are never considered for payment by Medicare. These include preventive examinations represented by CPT codes 99381-99397. Medicare only covers three immunizations (influenza, pneumonia, and hepatitis B) as prophylactic physician services. Cosmetic procedures are never covered unless there is a medically-necessary reason for a procedure. In this instance, you should document and code it as such. Services rendered to immediate relatives and members of the household are not eligible for payment.
There are three modifiers to consider when dealing with non-covered services:
Notice of liability issued, voluntary payer policy. A -GX modifier should be attached to the line item that is considered an excluded, non-covered service. The -GX modifier indicates you provided the notice to the beneficiary that the service was voluntary and likely not a covered service.
Item or service statutorily excluded, does not meet the definition of any Medicare benefit or for non-Medicare insurers, and is not a contract benefit. If you do not provide the beneficiary with notice that the services are excluded from coverage, you should append modifier -GY to the line item. Modifier -GY indicates a notice of liability (ABN) was not provided to the beneficiary.
Item or service expected to be denied as not reasonable and necessary. Modifier -GZ should be added to the claim line when it is determined an ABN should have been obtained but was not.
If the patient’s policy coverage is unclear, inform the patient that they may be responsible for paying for the service. This should be done before you provide the service. If a Medicare patient wishes to receive services that may not be considered medically reasonable and necessary, or you feel Medicare may deny the service for another reason, you should obtain the patient’s signature on an Advance Beneficiary Notice (ABN).
Medicare requires an ABN to be signed by the patient prior to beginning the procedure before you can bill the patient for a service Medicare denies as investigational or not medically necessary. Otherwise, Medicare assumes the patient did not know and prohibits the patient from being liable for the service. You must explain the ABN to the patient and the patient must sign it before the service is provided.
The ABN must have the following three components:
- A detailed description of the service to be provided;
- Estimated cost within $100; and
- The reason it is believed Medicare will not cover the service
If an ABN is obtained, attach modifier -GA (waiver of liability statement issued as required by payer policy, individual case) to the line item(s) within the claim to indicate the patient has been notified. Utilizing ABNs and corresponding modifiers appropriately assists with compliance reporting in your office.