Medicare patients who are handed an Advance Beneficiary Notice, known as an ABN, keep the right to appeal a denial only if they check option 1 on the form. Medicare.gov says options 2 and 3 both end the right to appeal, and that the notice itself is not an official denial of coverage. The form, used under Original Medicare, warns that Medicare may not pay, which is why the box checked decides who carries the bill.
A doctor, provider or supplier writes an ABN when it expects Medicare to refuse payment for an item or service. The form lists what is involved, estimates the cost and gives the reasons Medicare may not pay. The patient must choose one of three options and sign to confirm reading it.
The three boxes on the form
Under Medicare.gov’s description, option 1 means the patient wants the items or services and wants a claim submitted to Medicare. The provider may ask for payment up front. If Medicare denies payment, the patient is responsible for paying but keeps the right to appeal.
Option 2 means the patient wants the items or services but does not want a claim submitted. The patient may have to pay now, and Medicare.gov says “you can’t file an appeal.” With no claim, Medicare never makes a decision that could be appealed.
Option 3 means the patient does not want the items or services at all. No claim is submitted and the patient owes no payment, but here too Medicare.gov says an appeal is not available. The only option that leaves a path to a Medicare decision is the first.
The question for anyone holding the form is therefore concrete: is the service worth having if Medicare says no, and does the patient want that decision on record? Checking option 1 can mean paying up front and waiting, while option 2 can look cheaper at the counter and cost the right to challenge the result. A patient unsure which to pick can ask the provider to explain the estimated cost before signing.
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Why the notice is not a denial
Medicare.gov states that an ABN is not an official denial of coverage. An official decision comes only after a claim is submitted and Medicare decides on payment. A patient who reads the form as a refusal and walks away has not been denied anything by Medicare.
That is also why option 1 matters for the money. If Medicare pays after all, the provider refunds the patient’s payments, not including copayments or deductibles. If Medicare denies, the patient owes the bill, but the denial arrives with a decision letter that opens the appeal.
The appeals path is long but structured. Medicare.gov says there are generally 5 levels of appeals, and at each level the patient gets a decision letter with instructions on how to move to the next. Those letters are what a patient with option 1 on file can use, and a patient who checked option 2 or 3 has no such letter to use.
What makes an ABN valid
A provider cannot hand over just any form. 42 CFR 411.408, the refund rule for physicians who do not accept assignment, says a physician must refund money collected if Medicare denies payment as not reasonable and necessary, unless the physician could not reasonably have been expected to know Medicare would not pay. A written notice given before the service, with the patient’s signed agreement to pay, removes the refund duty.
To count, the notice must be in writing and use approved language. It must identify the specific service Medicare is likely to deny and state the physician’s reasons for expecting the denial. A notice is not valid if it is given routinely to all patients or if it only says Medicare might not pay.
The rule has a plain money consequence for patients. A blanket form signed at check-in is not the protection it appears to be for the provider, and a patient handed one has reason to ask what specific service and what specific reason the form names. The estimate on the form is the figure to compare against the bill that comes later.
The skilled nursing facility version
Nursing facilities use a related form. Medicare.gov says a skilled nursing facility issues a Skilled Nursing Facility Advance Beneficiary Notice when Part A may stop covering care. A patient who chooses services Medicare may not cover does not pay for them until a claim is submitted and Medicare officially denies payment.
One cost keeps running in the meantime. The patient must keep paying normal costs during processing, including the daily coinsurance. The Medicare.gov page does not list the coinsurance amount, so patients need the figure from the facility’s billing office or their Medicare Summary Notice.
The common thread is that a signature on these forms is a financial decision. Option 1 holds the appeal right and can lead to a refund if Medicare pays, while the other two options give up the right to ask Medicare to look again. A patient who keeps a copy of the signed form, with the option checked, has the proof needed if a bill or a collection notice shows up later.
Medicare said no and a bill is on the way?
The stake is a bill for care Medicare declined to pay, and in the worst case a provider that sends the balance to a collector. A patient who checked option 1 can appeal, but the appeal and any dispute with the provider run on dates and written requests.
50 Letters to SSA, IRS, Banks & Insurers includes insurer letters for denied claims, and debt collector and credit bureau letters to prove the debt and stop calls. With every letter it gives when to send it, where, the deadline and what to enclose.
Page 1 of each letter lists when, where and the deadline, page 2 is the letter itself, and a mailing log at the back keeps a dated record. A large-print edition is included.
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This article was produced with AI assistance and edited for accuracy against the sources linked above.
