An Advance Beneficiary Notice of Noncoverage (ABN) is a mandatory written notice provided to a Medicare beneficiary when a healthcare provider believes Medicare may not cover a specific service or item. This standard government form (CMS-R-131) transfers potential financial liability from the provider to the patient. The ABN must be delivered and signed before the service is rendered, such as before a blood test is collected. It informs the patient they will be personally responsible for the full cost if Medicare denies the claim.
The Core Reason for Receiving an ABN for Lab Work
The reason a laboratory or physician issues an ABN for a blood test centers on “medical necessity,” a requirement for Medicare coverage. Medicare covers only services deemed “reasonable and necessary” for diagnosing or treating an illness or injury. If the test results are not expected to influence the patient’s treatment plan or diagnosis, Medicare may consider the test unnecessary, triggering the ABN.
A common trigger is when a test is ordered too frequently, exceeding established limits set by Medicare. For example, certain blood panels may only be covered once every six months. Medicare outlines these frequency limitations and coverage rules through National Coverage Determinations (NCDs) and Local Coverage Determinations (LCDs).
Another reason is when the blood test is considered a routine screening rather than a diagnostic tool. While Medicare covers a limited number of specific preventive screenings, most routine testing is excluded. Additionally, if the ordered blood test is experimental, investigational, or research-only, the provider must issue an ABN because such services are not covered by Medicare.
Patient Options and Financial Responsibility
Upon receiving an ABN, the patient must choose one of three distinct options presented on the form, each defining their consent and financial liability. The first option allows the patient to receive the blood test and requires the provider to submit a claim to Medicare for an official decision. By selecting Option 1, the patient agrees to pay for the service if Medicare ultimately denies the claim, but this selection preserves the right to appeal that denial. If Medicare ends up covering the test, the patient will be refunded any payments they made, minus any standard copayments or deductibles.
The second option also allows the patient to receive the blood test and accept full responsibility for the cost. By choosing Option 2, the patient instructs the provider not to submit a claim to Medicare. Since no claim is filed with Medicare, the patient forfeits all rights to appeal the non-coverage decision.
The third option is for the patient who decides not to receive the blood test. By selecting Option 3, the patient is not financially responsible for any costs associated with the test. No claim is submitted to Medicare, and therefore, no appeal rights are available. The patient must sign and date the ABN, confirming they have reviewed the estimated cost and understand the reason Medicare may not pay.
How to Appeal a Denied Blood Test Claim
The formal process for disputing a denial begins only if the patient chose Option 1 on the ABN, received the blood test, and Medicare subsequently denies the claim. This denial is communicated through the Medicare Summary Notice (MSN), which includes instructions on how to begin the appeal. The appeal process has multiple levels, and the patient must complete each step before moving to the next.
The first level is a Redetermination, which involves submitting a written request to the Medicare Administrative Contractor (MAC) that processed the original claim. This request must clearly explain why the denial was incorrect and include supporting documentation, such as new lab results or physician notes demonstrating medical necessity. If the Redetermination is unsuccessful, the patient can proceed to the second level, a Reconsideration by a Qualified Independent Contractor (QIC).
Should the QIC uphold the denial, the patient can then request a hearing before an Administrative Law Judge (ALJ), the third level of appeal. The request for an ALJ hearing must be submitted within 60 days of receiving the Reconsideration decision. The amount in controversy must meet a minimum dollar threshold for this hearing, though multiple denied claims can often be combined to meet this requirement.