Medicare ABN compliance protects your practice from financial liability when services may not be covered. An improperly completed Advance Beneficiary Notice means you can’t collect payment from patients if Medicare denies the claim.
This blog shows you exactly how to fill out ABN forms correctly, avoid costly mistakes, and maintain full compliance.
What is an ABN and When You Must Use It
An Advance Beneficiary Notice (ABN), officially known as CMS-R-131, is a mandatory form that notifies Medicare beneficiaries when a service may not be covered. This written notice transfers financial responsibility to the patient before services are rendered.
You must issue an ABN in three specific situations. First, when a service exceeds Medicare’s frequency limits, such as physical therapy visits beyond the coverage cap. Second, a service may be denied as not medically necessary based on the patient’s condition or diagnosis. Third, when a service is considered experimental or investigational.
Never use an ABN for services Medicare never covers under any circumstances, such as cosmetic procedures or routine physical exams. Using ABNs incorrectly for these services creates compliance violations and confuses patients about their actual coverage.
Step-by-Step ABN Form Completion Guide
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Header Section
Enter your practice name exactly as it appears on your Medicare enrollment. Include a complete phone number where patients can reach you with questions. This information must be clear and accurate.
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Box A – Services Description
List each specific service using clear, patient-friendly language. Write “MRI of left knee” not “diagnostic imaging.” Include relevant CPT codes if helpful, but descriptions must be understandable without medical training. Never use vague terms like “tests” or “procedures.” Each service needs its own line with specific details.
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Box B – Reason Medicare May Not Pay
Check only one reason and explain it clearly. If selecting “Medicare does not pay for this many services,” specify the exact frequency limit and where the patient stands. For “Medicare does not pay for this service,” explain why based on medical necessity criteria. For experimental services, state that Medicare hasn’t approved coverage yet. Be specific; patients deserve to understand why they might be responsible for payment.
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Box C – Estimated Cost
Provide a realistic dollar amount the patient will owe if Medicare denies coverage. This estimate must reflect your actual charges. Lowballing costs to encourage agreement violates compliance rules. If costs vary, provide a range with both a low and a high estimate. Update these figures regularly to match your current fee schedule.
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Patient Options Section
The patient must select one of three options. Option 1 indicates they want the service and will pay if Medicare denies coverage. Option 2 means they want the service but want you to bill Medicare first, then pay. Option 3 means they decline the service entirely. Explain each option verbally before asking for their choice. Never pre-select an option or pressure patients toward any specific choice.
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Signature Requirements
Both the patient and a staff member must sign. The patient’s signature confirms they received the notice, understand their options, and made an informed choice. Staff signature witnesses that the form was properly explained and voluntarily completed. Include the date both parties signed. Without proper signatures, the ABN is invalid.
Critical ABN Compliance Requirements
Timing is everything with ABN compliance. Issue the form before providing services, never after. Retroactive ABNs have zero legal standing and won’t protect you from write-offs.
Use only the current CMS-R-131 form version. Check the CMS website quarterly for updates. Outdated forms fail compliance audits immediately.
ABNs must be available in the patient’s preferred language. CMS provides official translations in Spanish, Chinese, Russian, and other languages. Keep translated versions readily accessible.
Retain every signed ABN for five years minimum. Store them in a location accessible to billing staff for quick retrieval during claim appeals or audits.
Never use blanket ABNs covering multiple future visits or unspecified services. Each ABN must relate to specific services on a specific date. Blanket notices violate Medicare rules completely.
Always provide the patient with a copy of the signed ABN. They need it for their records, and you need documented proof that they received it.
Common ABN Compliance Mistakes That Cost Practices Money
Using outdated ABN forms is the most frequent violation. CMS updates the form periodically, and old versions aren’t compliant regardless of how thoroughly you complete them.
Vague service descriptions destroy ABN validity. Writing “treatment” or “therapy” instead of specific procedures means the patient couldn’t make an informed financial decision.
Missing or grossly inaccurate cost estimates invalidate ABNs. If you estimate $50 but bill $500, the patient wasn’t properly notified and can dispute charges.
Collecting ABNs after service delivery is worthless. The notice must be provided before treatment so patients can decline if they are unwilling to pay.
Forcing or pressuring patients to sign creates compliance nightmares. Patients must voluntarily choose their option without coercion. Document any patient questions and your explanations.
Failing to provide patient copies leaves you without proof of proper notification if disputes arise later.
Creating blanket ABNs for routine services “just in case” violates Medicare guidelines. Only issue ABNs when you genuinely expect denial for the specific reasons allowed.
ABN Compliance Checklist
Before finalizing any ABN, verify these elements:
- The current CMS-R-131 form version is being used
- Practice name and contact information are complete and accurate
- Box A contains specific, clear service descriptions
- Box B has one reason checked with a detailed explanation
- Box C shows realistic cost estimates in dollars
- The patient selected one of the three options
- Both patient and staff signatures are present with dates
- Form is being issued before service delivery
- Patient received their copy of the signed form
- The original is filed for five-year retention
Protect Your Practice Revenue Through Proper ABN Compliance
Correct ABN form completion is non-negotiable for Medicare providers. Every staff member who interacts with patients during scheduling or registration needs thorough ABN compliance training.
Audit your ABN process quarterly. Pull random samples and check them against this compliance checklist. Identify patterns in errors and retrain staff immediately.
When ABNs are completed correctly, you’re protected financially, and patients appreciate the transparency about potential costs. Make ABN compliance a cornerstone of your revenue cycle management, not an afterthought.
Partner with experts who understand Medicare compliance inside and out. An experienced medical billing specialist provides comprehensive ABN training and compliance auditing to protect your practice revenue.
Frequently Asked Questions:
Q: What is the CMS-R-131 form?
A: CMS-R-131 is the official Medicare Advance Beneficiary Notice form used to notify patients when services may not be covered by Medicare.
Q: When must an ABN be given to the patient?
A: ABNs must be issued before services are rendered, never after—retroactive ABNs have no legal standing and won’t protect your practice from write-offs.
Q: How long must practices retain signed ABN forms?
A: Signed ABN forms must be retained for a minimum of five years and stored where they can be quickly retrieved during audits or claim appeals.
Q: Can I use a blanket ABN for multiple services or visits?
A: No, blanket ABNs are prohibited—each ABN must be service-specific and dated for the particular treatment being provided.