Observation and ABNs

[terrymatherne]

Hi Oliver,

I learned that if you read enough about observation and billing for those services, you will either get quite confused or totally confused but you will never feel absolutely correct or comfortable about how you handle the situation. If you follow CMS guidelines, you usually have an upset and irate physician. If you please the physician, you probably violate the regulation or "give away services". According to CMS (Transmittal 107, CR 6492):

C. Services Not Covered by Medicare and Notification to the Beneficiary

In making the determination whether an ABN can be used to shift liability to a beneficiary for the cost of non-covered items or services related to an encounter that includes observation care, the provider should follow a two step process. First, the provider must decide whether the item or service meets either the definition of observation care or would be otherwise covered. If the item or service does not meet the definitional requirements of any Medicare-covered benefit under Part B, then the item or service is not covered by Medicare and an ABN is not required to shift the liability to the beneficiary. However, the provider may choose to provide voluntary notification for these items or services.

Second, if the item or service meets the definition of observation services or would be otherwise covered, then the provider must decide whether the item or service is "reasonable and necessary" for the beneficiary on the occasion in question, or if the item or service exceeds any frequency limitation for the particular benefit or falls outside of a timeframe for receipt of a particular benefit. In these cases, the ABN would be used to shift the liability to the beneficiary (see Pub. 100-04, Medicare Claims Processing Manual; Chapter 30, "Financial Liability Protections," Section 20, at http://www.cms.hhs.gov/manuals/downloads/clm104c30.pdf for information regardinLimitation On Liability (LOL) Under §1879 Where Medicare Claims Are Disallowed).

Based on this information, I would interpret this to mean all services and tests that are billable would require an ABN if we feel they will not be covered by Medicare. What's your opinion after reading this?  Thanks!

Terry