Here is the applicable portion that is a change to previous guidance, but the entire memo needs to be read and understood. The ABN they are talking about is the CMS-R-131:
Q1: How did the American Taxpayer Relief Act (ATRA) of 2012 (PL 112-240, January 3, 2013) affect liability provisions for services above the therapy cap?
A1: Prior to the ATRA, original (fee-for-service) Medicare claims for therapy services at or above therapy caps that did not qualify for a coverage exception were denied as a benefit category denial, and the beneficiary was financially liable for the non-covered services. CMS encouraged suppliers and providers to issue a voluntary Advance Beneficiary Notice of Noncoverage (ABN), Form CMS-R-131, as a courtesy, to alert beneficiaries to potential financial liability. However, issuance of an ABN wasn’t required for the beneficiary to be held financially liable.
Section 603 (c) of the ATRA amended §1833(g)(5) of the Social Security Act (the Act) to provide limitation of liability (LOL) protections (See §1879 of the Act) to beneficiaries receiving outpatient therapy services on or after January 1, 2013, when services are denied and the services provided are in excess of therapy cap amounts and don’t qualify for a therapy cap exception. Now, the provider/supplier must issue a valid, mandatory ABN to the beneficiary before providing services above the cap when the therapy coverage exceptions process isn’t applicable. The ABN informs the beneficiary why Medicare may not or won’t pay for a specific item or service and allows the beneficiary to choose whether or not to get the item or service and accept financial responsibility. ABN issuance allows the provider to charge the beneficiary if Medicare doesn’t pay. If the ABN isn’t issued when it is required and Medicare doesn’t pay the claim, the provider/supplier will be liable for the charges.
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