You must issue an ABN when you expect Medicare may deny payment for an item or service because:
- It is not considered reasonable and necessary under Medicare Program standards.
- The care is considered custodial.
- Outpatient therapy services are in excess of therapy cap amounts and do not qualify for a therapy cap exception.
The following three triggering events may prompt you to issue an ABN:
Initiations
An initiation occurs at the beginning of a new patient encounter, start of a plan of care, or beginning of treatment. If you believe at initiation that Medicare will not cover certain otherwise covered items or services because they are not reasonable and necessary, you must issue an ABN prior to the beneficiary receiving the noncovered care.
Reductions
A reduction occurs when a component of care decreases (for example, frequency or duration of a service). An ABN should not be issued every time there is a reduction in care. If a reduction occurs and the beneficiary wants to continue to receive the care that is no longer considered medically reasonable and necessary, you must issue an ABN prior to furnishing noncovered care.
Terminations
A termination is the discontinuation of all or only certain items or services. If services are being terminated and the beneficiary wants to continue receiving care that is no longer considered medically reasonable and necessary, you must issue an ABN prior to furnishing noncovered care.
