The Difference Between Advance Beneficiary Notices (ABN) and Private Contracts

An Advance Beneficiary Notice (ABN) allows a beneficiary to make an informed consumer decision by knowing in advance that the beneficiary may have to pay out-of-pocket. An ABN is not needed where the item or service is categorically excluded from Medicare coverage or outside the scope of the benefit.

An ABN is used when the physician/practitioner believes that Medicare will not make payment, while private contracts are used for services that are covered by Medicare and for which payment might be made if a claim were to be submitted.

Private Contracting Rules When Medicare is the Secondary Payer

The opt-out physician/practitioner must have a private contract with a Medicare beneficiary for all Medicare-covered services notwithstanding that Medicare would be the secondary payer in a given situation. No Medicare primary or secondary payments will be made for items and services furnished by a physician/practitioner under the private contract.