On this page · 5 sections
If a provider expects Medicare to deny a service as not reasonable and necessary, and does not tell the patient in writing first, the provider usually absorbs the loss. The Advance Beneficiary Notice of Noncoverage (ABN), form CMS-R-131, is how the patient is told in advance. A valid, signed ABN shifts the financial liability to the patient if Medicare denies the claim.
Part 1 of 5
When to give an ABN
| Situation | ABN | Example |
|---|---|---|
| Medicare may deny the service as not reasonable and necessary (§1862(a)(1) of the Act) | Required to bill the patient | Test more often than the LCD allows; diagnosis not on the covered list |
| The service is never covered by law (statutory exclusion) | Optional (voluntary), but encouraged | Routine physical, cosmetic surgery, hearing aids, routine foot care |
| There is no specific reason to expect a denial | Not allowed (a "routine" notice) | Having every Medicare patient sign one "just in case" |
CMS calls notices given without a real reason routine or blanket notices. They are not valid and do not protect the provider.
Done: When to give an ABN
Part 2 of 5
What makes an ABN valid
An ABN only protects the provider if it is effective. The Medicare Claims Processing Manual (chapter 30, §50) says it must be:
- On the current OMB-approved form, with every required blank filled in. Check the expiration date printed at the bottom left of the form. The version approved in March 2026 is valid through 03/2029, and older versions are not valid for services on or after 12 May 2026.
- Specific: it names the item or service and the reason Medicare may not pay, in words the patient can understand (for example "Medicare pays for this test only once every 5 years").
- Given with a good-faith cost estimate of the service.
- Delivered in person if possible, by someone who can explain it and answer questions.
- Delivered far enough in advance for the patient to think about the options, and never during an emergency or under pressure.
- Signed and dated by the patient (or their representative), with the patient's option box checked.
The provider keeps a copy, generally for 5 years from the date of service, and the patient gets a copy.
Done: A valid ABN
Part 3 of 5
The patient's three options
The patient chooses one box on the form:
| Option | What the patient chooses | Is Medicare billed? | Can the patient appeal? |
|---|---|---|---|
| Option 1 | Wants the service and wants Medicare billed for an official decision; pays if denied | Yes, with modifier GA | Yes, after the Medicare notice |
| Option 2 | Wants the service but does not want Medicare billed; pays now | No | No (there is no Medicare decision) |
| Option 3 | Does not want the service | No (service not given) | No |
If the patient refuses to choose an option or sign, note the refusal on the form (CMS suggests listing a witness). The provider then decides whether to give the service.
Done: The patient's options
Part 4 of 5
The liability modifiers
| Modifier | Meaning | When to use it | Who pays if denied |
|---|---|---|---|
| GA | Waiver of liability statement issued as required by payer policy | A valid ABN is on file for an expected medical-necessity denial | Patient |
| GZ | Item or service expected to be denied as not reasonable and necessary | You expected a denial but no valid ABN was obtained | Provider |
| GX | Notice of liability issued, voluntary under payer policy | A voluntary ABN was given for a statutorily excluded service | Patient |
| GY | Item or service statutorily excluded or not a Medicare benefit | The service is never covered (with or without an ABN) | Patient |
- GA and GZ are about medical necessity. Never put both on the same line.
- GX and GY are about services Medicare never covers. GX is often reported together with GY.
- Using GZ is honest reporting: it tells Medicare you knew a denial was likely and accept the loss. Medicare treats these lines as provider liability.
Vitamin D test with a diagnosis not on the LCD list
A Medicare patient asks for a vitamin D test (82306) "because a friend had one." The provider documents only fatigue, and the MAC's vitamin D article does not list fatigue as a covered reason.
- The provider explains, gives an ABN listing "Vitamin D test, 82306" with the reason "Medicare does not cover this test for your symptoms under its coverage policy" and an estimated cost.
- The patient checks Option 1 and signs before the blood draw.
- Bill 82306 with GA. If Medicare denies it, the patient pays (the remittance shows PR, patient responsibility).
- If the ABN had not been obtained: bill with GZ, and the provider absorbs the denial. Do not bill the patient.
Done: Liability modifiers
Part 5 of 5
Check yourself
Done: Check yourself