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January 2, 2008

The Advance Beneficiary Notice of Noncoverage and Correct Use of Modifiers GA and GY - Revised

Both Medicare beneficiaries and durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) suppliers have certain rights and protections related to financial liability under the Fee-for-Service (FFS) Medicare program. These financial liability and appeal rights and protections are communicated to beneficiaries through Advance Beneficiary Notices of Noncoverage (ABN) given by suppliers.

An ABN is a written notice the supplier gives to a Medicare beneficiary before providing items and or services that are expected to be denied by Medicare based on one of the following statutory exclusions:

  1. The item or service may be denied as "not reasonable and necessary" pursuant to Section 1862(a)(1) of the Social Security Act
  2. The item or service may be denied due to an unsolicited telephone contact pursuant to Section 1834(a)(17)(B)
  3. The supplier number requirements not being met pursuant to Section 1834(j)(1)
  4. Denial of a request for Advance Determination of Medicare Coverage (ADMC) pursuant to Section 1834(a)(15)

When an item or service is provided to a Medicare beneficiary and is expected to be denied based on one of the four exclusions listed above, it is the responsibility of the supplier to notify the beneficiary in writing through the use of the ABN before the item or service is delivered or purchased. If the supplier issues a properly executed ABN with Option 1 selected by the beneficiary, the DMEPOS supplier must submit the claim to Medicare using the GA modifier on each Healthcare Common Procedural Coding System (HCPCS) code that is expected to be denied. The GA modifier indicates that the supplier has a waiver of liability statement on file.

Statutorily Excluded Items

The GY modifier indicates that an item or service is statutorily excluded or does not meet the definition of any Medicare benefit. Some local coverage determinations (LCD) require the use of the GY modifier when the item or service may be excluded from coverage. In this situation, suppliers are instructed to code the claim with the appropriate HCPCS code indicated in the LCD and append the GY modifier. Some examples of statutory exclusions where the GY modifier is required per policy would include:

To determine if an exclusion of Medicare benefits exist, suppliers must review the applicable LCD and policy article for the item or service being provided.

Suppliers are reminded that modifiers GA and GY should never be coded together on the same line for the same HCPCS code. It is important to distinguish situations in which an item is denied because it is statutorily excluded or does not meet the definition of any Medicare benefit from those situations in which at item is denied because it is not reasonable and necessary. Some examples of statutorily excluded items or situations include, but are not limited to:

A description of the statutory benefit items that are processed by the DME Medicare Administrative Contractors (MACs) can be found in the Jurisdiction C DME MAC Supplier Manual. Some examples of items or situations which do not meet the definition of a Medicare benefit include, but are not limited to:

To access the LCDs and policy articles, please visit the CGS Web site at www.cgsmedicare.com. Select the DME MAC Jurisdiction C homepage, then click on the Local Coverage Determinations link.

Voluntary Notification

Under the new instruction for the revised ABN, the Centers for Medicare & Medicaid Services ( CMS ) advise that this form may be used to voluntarily notify Medicare beneficiaries of an expected noncovered denial of Medicare payment due to the statutory exclusion of an item or service, or the item or service not meeting the definition of any Medicare benefit.

Section 1848(g)(4) of the Social Security Act states that items that are categorically excluded from Medicare benefits (i.e. hearing aids, personal comfort items, etc.) are not required to be submitted to the Medicare program by the supplier. However, if the beneficiary requests the supplier to submit the claim to Medicare, the claim should be coded with the designated HCPCS, however, neither modifiers GA nor GY are required. The supplier and the Medicare beneficiary will receive a patient responsibility denial for the noncovered services.

For additional instruction regarding the proper execution of an ABN, suppliers are encouraged to review the CMS Internet-Only Manual Medicare Claims Processing Manual, Chapter 30, "Financial Liability Protections," Sections 50 and 60 at: www.cms.hhs.gov/manuals.