When you're on Medicare, the government helps cover most of your health care expenses. However, there are situations when Medicare might not pay for what your medical provider recommends. In this case, you would receive an Advance Beneficiary Notice of Noncoverage (ABN). Here's how these notices work, the reasons you'd receive one, and your options to manage one.

What Is an Advance Beneficiary Notice of Noncoverage?

An ABN is a form which warns patients that Medicare may not cover a service requested by a medical provider, like a doctor, a skilled nursing facility or a hospital. This document is also known as a waiver of liability. Your provider will ask you to sign the ABN, showing you're aware Medicare might not cover the cost. By signing, you agree to pay if the government does not.

Your medical provider will still try to bill Medicare first. If Medicare denies the claim, then you will need to pay for it out-of-pocket. Your medical provider likely won't move forward with the recommended treatment unless you sign the ABN or another agreement to cover the bill. To figure out how much you might owe, ask the provider for a cost estimate when you receive the ABN.

What's Listed on an Advance Beneficiary Notice of Noncoverage?

Medical providers may use different versions of an ABN. There isn't one standardized form that's the same everywhere. However, the government requires that any ABN include a few key pieces of information.

The ABN should list the service or item that might not be covered by Medicare. It should also explain the specific reason why the care might not be covered, such as if there's an annual limit to how many times Medicare will pay for a certain test and you've gone over that limit.

The ABN could have a section where you need to request the provider try billing Medicare first. This is worth choosing since there is a chance the government could still pick up the bill.

Last, the form will ask you to sign, accepting that you would be responsible for the costs should Medicare not cover your treatment.

When Do ABNs Apply?

ABNs only apply when you are on Original Medicare, including if you have a Medicare Supplement plan, also known as Medigap. Even though your Medigap plan comes from a private insurance company, Medicare is your primary form of coverage. Since the government pays for most of your care, the provider will try to bill them first. As a result, your provider still uses the ABN system.

If you have a Medicare Advantage plan, you wouldn't receive ABNs. With Medicare Advantage, you're on a plan completely run by a private insurance company and they are the only ones paying the bills. The government just sends the insurer money to run the plan. Since Medicare isn't directly paying for your care, your provider wouldn't send them a bill and wouldn't use the ABN system. Instead, you would need to discuss with your insurance company whether they would cover a treatment.

Providers only need to issue ABNs for treatments that may or may not be covered by Medicare. For medical expenses that Medicare never covers, like paying for hearing aids, the provider is not required to give you an ABN.

What Are Common Reasons for an ABN?

There are two categories of ABNs: mandatory and voluntary. A provider must send an ABN in the following situations:

• Medicare provides limited coverage for the type of care. For example, Medicare used to have an annual spending limit on outpatient physical therapy (though that's no longer the case).
• Medicare sets a limit on how many times you can use a service. For example, you may only be able to receive three of a certain test per year.
• The provider believes Medicare could deny the claim for not being reasonable or necessary (like for an experimental treatment).
• You receive skilled nursing home care but are not homebound. Medicare only covers temporary stays, not long-term care.

In all these cases, Medicare could still end up paying the bill. But there's also a chance you could have to cover the entire cost yourself. That's why you need to sign the ABN acknowledging the risk.

Voluntary ABNs

If your provider knows for sure that Medicare will not pay for a medical service or item, they don't have to send an ABN but might do so anyway. They would do this as a courtesy to warn you about the upcoming bill. It also gives the provider legal protection, in case a patient is upset after receiving the bill. By signing an ABN, a patient agrees upfront to cover Medicare-ineligible medical expenses.

What Happens When You Receive an ABN?

If your provider gives you an ABN, you have three options. First, you can sign the ABN to move forward with your treatment. Your provider will try filing a claim with Medicare for the cost. They might ask you to pay some or all the cost upfront while Medicare reviews the situation.

Medicare will then let you know if they approve or deny the claim. If Medicare approves, they will refund you any payments you made to the provider that the government ended up covering. If Medicare denies the claim, you must pay for the treatment yourself.

Your second option is to not sign the ABN. Your medical provider will then not be able to bill Medicare for the services. They'll likely ask you to pay upfront, before giving you the care.

Last, you can decide not to receive the treatment.

Can You Appeal a Bill After an ABN?

Yes. Medicare's first decision is not final. If you think that the service should have been covered by the government, you can try appealing. Your provider will give you a Medicare Summary Notice, showing all the healthcare services you received, what the government paid and what you paid.

You then fill out a Medicare Redetermination Request Form. It's a one-page form listing your contact information and why you think a treatment should have been covered by the government. You then submit this form to the company handling Medicare claims for your provider. This company's contact information should be on the Medicare Summary Notice. They will send your appeal to the government for further review.

Another reason to appeal is if you think your provider did not properly prepare the ABN. As a result, they didn't give you enough warning about you possibly needing to pay for everything yourself. Some of the reasons why you might not be responsible for the cost include:

• The ABN was hard to read or difficult to understand.
• The ABN did not explain why Medicare might deny the claim for your specific situation. For example, the provider used a generic form covering all services, not the service you needed.
• The provider gave you the ABN only after you received the service or treatment.
• The provider gave you the ABN during an emergency or while in the middle of a treatment. For example, they asked you to sign the form while you were actively taking an MRI.

In these situations, you can appeal with Medicare. The government will review the case to decide whether you should be responsible for the charges or not.

If you need help figuring out what Medicare and your insurance will pay versus what they won't, consider speaking with an insurance agent. They can give you more information on ABNs so you can plan what to do next for your medical treatment.