Medicare's Limitation on Liability (LOL) protections apply when a physician believes that an otherwise covered Medicare item or service will be denied because the item or service is not reasonable and necessary or is for custodial care. In order to shift liability to the beneficiary, a physician is required to provide an Advance Beneficiary Notice (ABN) to a beneficiary in advance when he or she believes that items or services will likely be denied. If such notice is not given, physicians may not shift financial liability for such items or services to Medicare beneficiaries.
Mandatory Use of the ABN
An ABN must be used to convey to the beneficiary that a physician believes that an item or service will not be covered when:
•The item or service is not reasonable and necessary.
•The item or service is provided in violation of the prohibition on unsolicited telephone contacts.
•The item or service is for medical equipment and supplies for which the supplier number is not provided.
•The item or service is for medical equipment and/or supplies denied in advance.
•The item or service is for custodial care.
•The item or service is for hospice care provided to a patient who is not terminally ill.
The ABN is not required for items and services that are never covered under the Medicare statute (statutorily excluded) or for items and services that do not meet a technical benefit requirement (such as a required certification by a physician).
With respect to hospice services and Comprehensive Outpatient Rehabilitation Services (CORF), if there is a complete cessation of all Medicare covered services, an Expedited Determination notice must be issued by hospice and CORF providers.
Voluntary Use of the ABN
The ABN can be issued voluntarily in place of the Notice of Exclusion from Medicare Benefits (NEMB) for care that is never covered because it does not meet the definition of a Medicare benefit or for care that is explicitly excluded from Medicare coverage.
•The Medicare Claims Processing Manual (Chapter 30) lists the following as examples of care that are explicitly excluded from coverage:
•Services for which there is no legal obligation to pay.
•Services paid for by a government entity other than Medicare. This exclusion does not include services paid for by Medicaid on behalf of dual-eligibles.
•Services required as a result of war.
•Personal comfort items.
•Routine physicals and most screening tests.
•Routine eye care.
•Dental care.
•Routine foot care.