Services Not Reasonable and Necessary and ABN

Medicare does not cover items and services that are not reasonable and necessary for the diagnosis or
treatment of an illness or injury or to improve the functioning of a malformed body member.

Services denied as not reasonable and medically necessary, under section 1862(a)(1) of the Social
Security Act, are subject to the Limitation of Liability (Advance Beneficiary Notice) provision. Thus, to be
held liable for denied charge(s), the beneficiary must be given appropriate written advance notice of the
likelihood of non-coverage and agree to pay for services. A written notice covering an extended course of
treatment is acceptable, provided the notice identifies all services for which the provider believes
Medicare will not pay.

To determine whether a service or item is denied as “not medically necessary,” and whether the limitation
of liability provision is applicable:

• The service or item must be otherwise covered, and
• The service or item must be determined to be not reasonable and necessary for diagnosis or
treatment of any kind of illness, injury, or medical condition (investigational or experimental) or for
a particular case or for certain conditions

Advance Beneficiary Notice (ABN)

The purpose of the ABN is to inform a Medicare beneficiary, before he or she receives specified items or
services that otherwise might be paid for, that Medicare certainly or probably will not pay for them on that
particular occasion. The ABN, also, allows the beneficiary to make an informed consumer decision
whether or not to receive the items or services for which he or she may have to pay out of pocket or
through other insurance. In addition, the ABN allows the beneficiary to better participate in his/her own
health care treatment decisions by making informed consumer decisions.

Advance notice requirements to the beneficiary have specific requirements. When services are denied as
not being reasonable and necessary, the beneficiary is not responsible for payment of the service unless,
prior to the service being rendered:

• He/she has been notified in writing that Medicare will likely deny payment of the service/procedure for their specific condition; and;
• The beneficiary has signed the agreement stating they will assume financial responsibility for
payment of the service.

The reason given must be specific to the service(s) under consideration. A routine notice (blanket
waiver) and/or a notice, which does no more than state that denial is possible, is not acceptable.

ABN Billing Requirements
It is not necessary to submit a copy of the Advance Notice signed by the beneficiary with your claim. It
must be maintained in your records, and be available to the Carrier upon request.
CMS has developed the following modifier for providers to use to let Carriers know that they have the
notice on file.

GA Waiver of liability statement on file

Note: An advance notice must be provided prior to each service rendered which you believe may be
denied for medical necessity. If multiple services are rendered which may be subject to the advance
notice requirements, each procedure must be billed with the GA modifier.

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