Every PT practice that treats Original Medicare patients eventually offers something Medicare won’t pay for. Dry needling is the classic example. The Advance Beneficiary Notice of Noncoverage, or ABN, is how you tell the patient that before you treat them, so they can decide whether to go ahead and pay.

What is an ABN?

An ABN (form CMS-R-131) is a written notice you give a Medicare patient before you provide a service you expect Medicare not to cover. It warns the patient that they may have to pay for that service themselves, so they can make an informed choice about whether to receive it.

Every ABN should identify three things:

• The item or service Medicare may not pay for.

• Why you expect Medicare to deny payment.

• An estimated cost to the patient.

The patient then picks one of three options, signs, and dates the form. You keep the signed original and give the patient a copy. Use the current version of the form from CMS (the 2029 edition, labeled “Exp. 03/31/2029”). The ABN applies to Original Medicare only. Medicare Advantage plans have their own pre-service process.

What does signing an ABN do?

A signed ABN documents that the patient was told, in writing and ahead of time, that a specific service is not expected to be covered, and that they agreed to pay for it. For PT practices, the most common use is for services Medicare excludes by law or that fall outside the Medicare physical therapy benefit, such as dry needling. With a signed ABN on file, you can charge the patient for that specific, agreed-upon service.

For statutorily excluded services, CMS treats the ABN as voluntary. Even so, issuing one is the cleanest way to set expectations, document consent, and collect without disputes.

What an ABN does not do

An ABN is not a blanket waiver.

• It doesn’t let you bill patients cash for any Medicare denial. It covers only the service, reason, and time frame written on that form. A denial for a different service, or for a reason you didn’t list, is not the patient’s responsibility.

• It doesn’t cover your billing mistakes. Denials for wrong codes, missing modifiers, an unsigned plan of care, or late filing belong to the practice.

• It isn’t retroactive. An ABN signed after the service is worthless.

• It can’t be routine. CMS prohibits handing a generic ABN to every patient “just in case.” The reason has to be specific to the service you’re about to provide.

One related use worth knowing: when a normally covered service (such as therapeutic exercise) may be denied as not medically necessary, for example when care has become maintenance-only, an ABN is mandatory if you want to hold the patient liable, and the claim uses the GA modifier instead. This article focuses on non-covered services.

What goes in “Reason Medicare may not pay”?

Be specific and use plain language. The patient should be able to read it and understand why. Vague entries like “Medicare may not pay,” “Not covered,” or “Possible denial” defeat the purpose of the notice.

A good reason names the actual policy: “Medicare does not cover dry needling performed by a physical therapist. It is not a Medicare benefit.”

For the estimated cost, give a good-faith number. CMS considers an estimate acceptable if it’s within $100 or 25% of the actual charge, whichever is greater. You can list several services on one form, and one ABN can cover a repeated service for up to a year if nothing about the service or cost changes.

If the patient chooses Option 1

Option 1 means the patient wants the service and wants Medicare billed for an official decision. Here’s what the practice should do:

• Submit the claim to Medicare with the right modifiers. For a statutorily excluded service with a voluntary ABN, that’s GP, GY, and GX on the line.

• Collect payment. The form tells the patient you may ask to be paid now, so you can collect at the visit or wait for the denial.

• Expect a PR denial, not a CO denial. This is the step that matters most operationally. You want Medicare to deny the line with group code PR (patient responsibility), not CO (contractual obligation), which the practice has to write off. With a PR denial, the patient’s Medicare Summary Notice (MSN) explains that they owe your practice, and they can still appeal. Supplemental payers receive a correct remittance from Medicare and can process their portion appropriately. If a CO denial comes back, don’t bill the patient. Check the modifiers, correct the claim, and resubmit.

• Refund if Medicare pays. If Medicare covers the service after all, refund what the patient paid, minus any copay or deductible.

Patients often choose Option 1 because a secondary insurer needs a Medicare denial before it will consider the claim.

If the patient chooses Option 2

Option 2 means the patient wants the service but does not want Medicare billed. In that case:

• Don’t put the service on the Medicare claim.

• Collect payment directly, the same way you’d handle a self-pay or point-of-sale charge, at your cash rate for that service.

• Document as usual. Keep the signed ABN in the chart and record the service in the visit note.

The patient gives up the right to appeal, since nothing goes to Medicare. Any covered services on the same date are still billed to Medicare normally. If the patient picks Option 3, don’t provide the service, keep the signed form, and bill the rest of the visit as usual.

Example: dry needling with Option 1

A Medicare patient with chronic neck pain is on a plan of care that includes therapeutic exercise and manual therapy. The PT recommends adding dry needling to three or more muscles. Before treatment, the PT walks the patient through the ABN:

• Item, test, service or care: Dry needling, 3 or more muscles (CPT 20561)

• Reason Medicare may not pay: Medicare does not cover dry needling performed by a physical therapist. It is not a Medicare benefit.

• Estimated cost: $75 per session

• Additional information (optional): Applies to each dry needling session in your current plan of care.

The patient checks Option 1, signs, and dates the form. The claim for that visit looks like this:

Collect the $75 at the visit or after the denial posts. If the patient had chosen Option 2, the 20561 line would simply be left off the claim and the $75 collected as a self-pay charge. Modifier requirements for dry needling codes can vary by MAC, so confirm your contractor’s guidance.

Make ABNs part of the workflow

ABNs go wrong when they live on paper in a folder nobody checks. The signed form, the charge, the modifiers, and the patient payment should all connect to the same visit. See how PatientStudio’s billing tools help PT practices keep charges and patient payments in sync, or schedule a demo to walk through it with our team.

Sources: CMS Form CMS-R-131 and FFS ABN instructions, and the Medicare Claims Processing Manual, Chapter 30. This article is for general education, not legal or billing advice. Always confirm requirements with your MAC.