What is the purpose of an Advance Beneficiary Notice (ABN)?

The Advance Beneficiary Notice (ABN) serves the important purpose of informing Medicare beneficiaries when a service may not be covered based on Medicare’s definition of medical necessity. This notice is typically issued before a service is provided, allowing the patient to understand that the provider believes the service may not be reimbursed by Medicare. With this proactive communication, the patient is given the opportunity to decide whether to proceed with the service, knowing they may be responsible for the costs if Medicare denies coverage.

This notice plays a crucial role in the revenue cycle, as it helps avoid confusion, ensures the patient is informed about potential out-of-pocket expenses, and decreases the likelihood of disputes after treatment about what Medicare will pay. It acts as a risk management tool for both patients and providers regarding financial responsibilities related to healthcare services provided.