Advance Beneficiary Notice (ABN) Explained: When It Is Required, the Three Options, and What Voids It

Direct answer: An Advance Beneficiary Notice of Noncoverage, or ABN, is a written notice a provider gives an Original Medicare patient before a service that Medicare will probably not pay for. The notice uses the standard form CMS-R-131. It names the specific service, states in plain language why Medicare may deny it, gives a good-faith cost estimate, and lets the patient choose one of three options: receive the service and have Medicare billed, receive it and pay out of pocket without billing Medicare, or decline the service. A valid ABN transfers financial liability to the patient if Medicare denies the claim. Without a valid ABN, the cost of a denied service usually stays with the provider. The ABN applies only to Original Medicare, also called fee-for-service Medicare. It has no standing in Medicare Advantage.

WHEN AN ABN IS REQUIRED

An ABN is required when three things line up at the same time. First, the patient is in Original Medicare. Second, the service is one Medicare ordinarily covers. Third, the provider has a genuine, patient-specific reason to expect Medicare to deny payment in this particular case. The most common trigger is medical necessity: the clinician believes the service is the right care, but Medicare's coverage rules may not agree. That happens when the diagnosis does not support the service under a national coverage determination (NCD) or a local coverage determination (LCD), when the service exceeds a frequency limit, such as a screening test repeated sooner than Medicare allows, when the service is more than Medicare considers necessary for the patient's condition, or when the service is considered experimental or investigational under Medicare guidelines. The notice is a forecast about this claim, not a formality, which is why blanket ABNs are prohibited: handing the form to every Medicare patient, or for every instance of a service just in case, voids the protection, because the notice must state the specific reason this patient's claim may be denied. A vague reason such as "Medicare may not pay" fails for the same reason. Where there is no genuine expectation of denial, there is nothing to waive, and no ABN is needed.

WHEN AN ABN IS VOLUNTARY

An ABN is not required for services Medicare never covers, because the patient is responsible for them anyway. Examples are services excluded by law, such as routine physicals, and diagnoses a lab NCD lists as never covered. CMS still encourages a voluntary ABN as a courtesy, so the patient knows in advance what they will owe. For a voluntary ABN, the patient does not need to choose an option or sign. A voluntary notice is reported on the claim with modifier GX, and it never substitutes for a required ABN. Claims for statutorily excluded services, which do not meet the definition of any Medicare benefit, use modifier GY.

WHO USES THE ABN

A wide range of providers and suppliers use the ABN, including physicians, outpatient hospitals, home health agencies, hospices, independent laboratories, and durable medical equipment suppliers. Inpatient hospitals and skilled nursing facilities use the ABN for Part B items and services, and separate notices for Part A coverage decisions. The ABN must never be given to a patient in a medical emergency, and it must not be presented to a patient who is in no condition, distressed, sedated, or mid-emergency, to make the choice.

THE THREE OPTIONS THE PATIENT CHOOSES

The patient must personally select one option and sign. The choice decides how the claim, if any, travels. Option 1, receive the service and bill Medicare: the service is furnished, the claim is submitted, and Medicare decides. If Medicare pays, the patient owes only normal cost-sharing. If Medicare denies, the patient is personally liable for the full cost. This option preserves the patient's formal appeal rights, and most patients who want the service choose it. The claim is reported with modifier GA, which means a valid ABN is on file. Option 2, receive the service and pay out of pocket: no claim is submitted to Medicare, and the patient pays the practice directly. There are no Medicare appeal rights on a claim that was never filed, although the patient may later demand that a claim be submitted, which the provider must then do. Option 3, decline the service: the patient decides not to proceed. Nothing is furnished, nothing is billed, and nothing is owed. The signed notice simply documents that the choice was offered. Staff should explain the options neutrally and never steer a patient toward one of them. If the patient refuses to sign or to choose an option, note that on the form, give the patient a copy, and keep the original. CMS guidance says the provider should then consider not furnishing the service, unless that would put the patient's health or safety at risk.

WHAT MAKES AN ABN VALID

Most invalid ABNs fail on details that are entirely avoidable. The notice must be the current CMS-R-131, with its wording and format unmodified. CMS approved the current version of the form effective March 13, 2026, with an expiration date of March 31, 2029. The earlier version carrying a January 31, 2026 expiration date could be used only through May 11, 2026, and an outdated form issued after May 12, 2026 is invalid. The notice must identify the beneficiary and the provider, describe the specific service, state the reason Medicare may not pay in language a layperson understands, and give a good-faith cost estimate for that service. An estimate wildly off the eventual charge can void the notice. The beneficiary, or their representative, must personally select an option, sign, and date the form before the service, and receive a copy. The form must fit on a single page and use type large enough to read easily, generally at least 12-point font, with 10-point allowed when detailed information will not fit. Medicare ID numbers and Social Security numbers should not appear on the form. Minor errors such as a misspelled name do not automatically invalidate an ABN, as long as the patient can still be recognized as the patient on the form.

VALIDITY KILLERS

The recurring invalidators are: no signature or no date; a signature obtained after the service; a reason naming no patient-specific basis; a cost estimate that is missing or not a good-faith figure for the service; an old version of the form; the official form rewritten or reformatted; a signature photocopied or reused across visits; the notice issued as a blanket policy rather than for a specific expected denial; and the notice given to a Medicare Advantage patient, where it does not apply. An invalid ABN transfers nothing. Financial liability for the denied service falls back on the provider.

MEDICARE ADVANTAGE PATIENTS, A DIFFERENT DOOR

The ABN has no standing in Medicare Advantage. Medicare Advantage plans make their own coverage decisions, and neither the plan nor the beneficiary is bound by a fee-for-service notice. For a service a Medicare Advantage plan may not cover, the correct route is the plan's own pre-service process: request a pre-service organization determination before the service is provided. If the plan denies, it issues its own denial notice, the Notice of Denial of Medical Coverage or Payment, sometimes called an Integrated Denial Notice, which explains the denial reason and the appeal rights under that plan. A signed ABN given to a Medicare Advantage patient obliges the patient to pay nothing and the plan to do nothing.

REPORTING THE ABN ON THE CLAIM

A modifier on the claim line tells Medicare which notice situation stands behind the service, and the modifier must match the paperwork in the chart. GA means a valid ABN is on file: a required ABN was issued, the service is expected to deny as not reasonable and necessary, and liability has been properly transferred. The claim is still submitted so Medicare can issue the formal denial that makes the beneficiary's liability official. GZ means the service is expected to deny as not reasonable and necessary, but no ABN is on file. The provider accepts liability, and Medicare's denial assigns the cost to the practice, not the patient. GY means the item or service is statutorily excluded or does not meet the definition of a Medicare benefit. No ABN is required for excluded services, and the modifier is often used to obtain a formal denial so a secondary payer can be billed. GX means a notice of liability was issued voluntarily, under payer policy rather than Medicare requirement. It may be reported alongside GA or GY where applicable, and it never substitutes for a required ABN. A modifier that contradicts the chart is an audit finding waiting to happen. GA claimed with no signed ABN in the file is one of the most common versions of that mistake.

HOW LONG AN ABN LASTS, AND HOW LONG TO KEEP IT

A single ABN for an extended course of treatment can remain effective for up to one year, as long as there is no change in the care described on the original ABN, the beneficiary's health status, or the coverage rules that would require a new notice. If the course of treatment extends beyond one year, a new ABN is required for the remainder. The signed ABN must be retained in the beneficiary's record. Under the Medicare Claims Processing Manual, Chapter 30, section 50.6.4, and Chapter 1, section 110, the general retention period is five years from discharge or completion of delivery of care, when no other requirement under state law applies. Electronic retention of the signed paper document is acceptable. Retention is required in all cases, including when the beneficiary declined the care, refused to choose an option, or refused to sign the notice. Some billing guides shorten this to five years from the date of service; the manual's wording is discharge or completion of delivery of care, and state law may require a longer period, so follow the longer rule where it applies.

WORKED EXAMPLE, AN ILLUSTRATIVE LAB TEST

A physician orders a lipid panel for a patient in Original Medicare, and the front desk checks coverage when the visit is booked. The diagnosis on the order is not on the NCD's covered list for that test, so the practice has a genuine, patient-specific reason to expect a medical-necessity denial. Before the blood draw, staff give the patient a current CMS-R-131 naming the lipid panel, stating in plain language that Medicare does not pay for this test for the patient's condition, and giving a good-faith estimate of the practice's actual fee for the test. The patient reads the form, chooses Option 1, signs and dates it, and receives a copy. The lab performs the test, and the claim goes to Medicare with modifier GA. Medicare denies the claim as not reasonable and necessary. Because a valid ABN is on file, the patient is liable for the charge, and the patient keeps the formal appeal rights that come with Option 1. If the same practice had skipped the ABN and billed the patient after the denial, the liability would have stayed with the practice. If the practice had handed the patient a blanket ABN at registration with no specific reason, or obtained the signature after the blood draw, the notice would have been invalid and the same result would follow. This example is illustrative; the NCD covered list, the estimate, and the denial outcome depend on the actual test, diagnosis, and coverage rules in each case.

CHECKLIST

FREQUENTLY ASKED QUESTIONS

A note on codes and coverage: This article is educational information about Medicare billing notices, not legal or compliance advice. Coverage rules, NCDs, LCDs, and form versions change, so always verify them against current CMS guidance and the Medicare Claims Processing Manual, Chapter 30, before acting. The worked example is illustrative and does not describe a real patient or claim.

Related reading: How to Appeal a CO-50 Denial · How to Appeal an MUE Denial · How to Appeal a CO-11 Denial · Claim Denial Codes: Complete Guide · Claim Denial Management Workflow