Giving the Advanced Beneficiary Notice (ABN)

The Centers for Medicare & Medicaid Services (CMS) has released updated instructions for the Advance Beneficiary Notice of Noncoverage (ABN) Form CMS-R-131, extending the form’s expiration date to March 31, 2029 while making only minor clarifications to the accompanying instructions.

While the update does not introduce significant policy changes, it serves as an important reminder about the role the ABN plays when Medicare coverage is uncertain.

The ABN is issued to Medicare fee-for-service beneficiaries when a provider believes that Medicare may deny payment for a particular service. The notice must be presented before the service is provided, allowing the beneficiary to make an informed decision about whether to proceed with care and accept potential financial responsibility if Medicare does not cover the service.

The newly released instructions primarily focus on clarifying existing guidance, rather than introducing new requirements. CMS has reinforced several longstanding expectations, including:

• The ABN must be issued before the item or service is provided;
• The notice must clearly identify the specific service or service category that may not be covered;
• Providers must include a reasonable estimate of the cost the patient could be responsible for; and
• The beneficiary must be given adequate time to review the notice and choose an option.

The updated instructions also improve formatting and readability, making it easier for staff to understand how each section of the form should be completed.

One area where the ABN may become particularly relevant is when hospitals are dealing with patients who have been cleared medically from the emergency room, but may not have an ideal discharge plan due to social reasons. This can involve tugging on provider heartstrings and internal alarms, along with a misguided sense that bedding the patient will solve a housing or caretaker issue. Examples may include patients who lack a safe discharge environment, need temporary supervision, or require placement assistance, but do not meet Medicare’s inpatient or observation medical necessity criteria.

In situations where a traditional Medicare beneficiary is being bedded for social reasons, such as an outpatient in a bed, an ABN may be used to notify the patient that Medicare is expected to deny payment – and that they may be responsible for the cost if they choose to proceed.

For case managers and utilization review teams, these situations often arise during discussions about discharge barriers such as homelessness, caregiver absence, or placement delays, either after treatment, in the ED, or after observation services have been completed. While the patient’s social needs may be significant, Medicare coverage decisions still remain tied to medical necessity requirements.

Issuing an ABN in these circumstances helps ensure transparency with the beneficiary while protecting the hospital from financial liability, when services are known to be outside Medicare coverage parameters.

Although the updated ABN instructions involve only minor revisions, they highlight the importance of maintaining strong frontline workflows. Registration staff, case managers, utilization review nurses, and financial counselors should all understand when ABNs are appropriate and how they must be completed.

According to CMS guidelines, common audit findings for noncompliance continue to include:

• Issuing ABNs after services have already begun;
• Using vague or blanket descriptions of services; and
• Failing to include a reasonable cost estimate.

Ensuring proper ABN use supports clear communication with patients about coverage limitations and allows them to make informed decisions about their care.