American Academy of Professional Coders (AAPC) Practice Exam

What is the purpose of an ABN?

1. To increase the provider's billing efficiency

2. To inform patients about potential Medicare denials

3. To reduce paperwork for Medicare reimbursements

4. To notify patients of their eligibility for services

The correct answer is: To inform patients about potential Medicare denials

The purpose of an Advance Beneficiary Notice of Noncoverage (ABN) is primarily to inform patients about potential Medicare denials. When a healthcare provider believes that a service or item may not be covered by Medicare, they must present an ABN to the patient, making them aware that payment may not be guaranteed. This notice gives the patient the opportunity to decide whether to proceed with the service or item, understanding they may be responsible for payment if Medicare ultimately denies the claim. It is an essential tool for transparency in the billing process, ensuring patients are adequately informed about their financial responsibilities before receiving care.