Beneficiary Upgrade and Advanced Beneficiary Notice (ABN)

By Kim Turner, RN – Clinical Consultant

An upgrade is an item with features that go beyond what is medically necessary. DME upgrades involve situations in which the upgraded item or component has a different HCPCS code than the item that will be covered by Medicare.

An option/accessory that is beneficial primarily in allowing the beneficiary to perform leisure or recreational activities is non-covered.

An ABN cannot be used to charge beneficiaries for premium quality services described as “excess components” and an ABN cannot be used to shift liability for an item or service that is described on the ABN as being “better” or “higher quality” but do not exceed the HCPCS code description.

The upgrade item must be within the range of items or services that are medically appropriate for the beneficiary’s medical condition and the purpose of the physician’s order. ABNs may not be used to substitute a different item or service that is not medically appropriate for the beneficiary’s medical condition for the original item or service. The upgraded item must still meet the intended medical purpose of the item the physician ordered.

Use of an ABN to furnish an upgraded item or service, with the beneficiary being personally responsible for the difference between the costs of the standard and upgraded item or service, does not change coverage or payment rules, statutory provisions, or manual instructions for the particular benefit involved.

You must bill two line items for upgraded DMEPOS items where the beneficiary requests an upgrade.

You must bill both lines on the same claim in the following order:

Claim Line 1: Bill the appropriate HCPCS code for the upgraded item that you actually provided to the beneficiary with the dollar amount of the upgraded item. If you have a properly obtained ABN on file signed by the beneficiary, use the GA modifier. If you did not properly obtain an ABN signed by the beneficiary, use the GZ modifier.

Claim Line 2: Bill the appropriate HCPCS code for the reasonable and necessary item with the actual charge for the item. Use the GK modifier.

Example:

Claim line 1 K0884 NU KH BP GA  ( with a properly signed ABN on file)   

Claim line 2 K0861 NU KH BP GK KX    

Definition of Modifiers

GA – Waiver of Liability Statement on file (expected to be denied as not reasonable and necessary, ABN on file)

GZ – Item or Service not Reasonable or Necessary (expected to be denied as not reasonable and necessary, no ABN on file)