The Centers for Medicare & Medicaid Services (CMS) hold well-established guidelines regarding what is considered medically necessary within the realm of testing. Medical necessity is important in clinical testing because tests deemed to fall out of the definition of being medically necessary can end up being denied by CMS for reimbursement. As well, CMS has established guidelines regarding frequency limitations. Reimbursement denials commonly happen if a patient meets a frequency limitation or if they fail to meet specific diagnosis requirements.

To prevent situations like this, clinical laboratories work with forms known as Advanced Beneficiary Notices (ABN). An ABN plays a significant role within the laboratory testing process for both labs and facilities.  It is often used in cases where a patient or resident may not have insurance, suspect a denial, or wish to take responsibility for any payment. If an ABN is provided prior to the lab tests being performed, the Medicare beneficiary is held financially responsible if Medicare does not cover the test. In the event a patient is insistent on having a lab test performed and there is not a medical necessary diagnosis according to Medicare, a signed ABN is to be provided in advance.

An ABN form is valid for up to one year from the date of service and covers only the lab tests specified on the form.

The most common denials related are as follows:

  • Lipid Panel – Diagnosis Invalid
  • Thyroid Tests – Frequency Limitation Met
  • Vitamin D – Overutilization with Valid Diagnosis

For facilities working with Aculabs, the ABN can be found on the back of the white carbon copy of the Aculabs lab slip. A facility ordering online can find the ABN box in their online ordering form. The ABN box has to be checked off and it will print along with the requisition form.