Additional Questions for Medicare Patients

Medicare will pay for services determined to be reasonable and necessary under section 1862(a)(1) of the Medicare law. Pacific Diagnostic Laboratories (PDL) believes that physicians are in the best position to know the clinical needs of their patients. However, in some cases, Medicare does not pay for tests performed even though deemed necessary by the physician. Before a specimen is collected, you may be asked to sign an Advanced Beneficiary Notice, or ABN.

Click questions for more information.


Must I sign an ABN every time I receive service?

No. You’ll be asked to sign an ABN only when the circumstances indicate Medicare may deny payment for the ordered test. There may be visits to PDL when you’ll be asked to sign an ABN and other visits when you will not. It all depends on the particular test and the provided diagnosis.

Must I sign the ABN?

No. There are three options:

Option 1: You may sign the ABN and have the test performed. If Medicare elects to not pay the fee, you will be billed for the test not covered by Medicare.

Option 2: You may refuse to have the testing billed to Medicare.  However, in  having the test performed,  you will be held responsible for payment. We advise you to consult with your doctor before choosing this option.

Option 3: You may refuse to have testing performed.

What is an ABN?

An ABN is a form that advises you prior to receiving service that you may have to pay for a test your doctor has ordered.

Why do you want me to sign an ABN?

Although the Medicare program pays for most lab tests, it doesn’t pay for some tests under certain circumstances. The reason you are being asked to sign an ABN is based on the information we have received from your physician that Medicare is likely to deny payment. Pacific Diagnostic Laboratories must ask the patient to pay.

Why don’t you think Medicare will pay for this test?

Medicare pays only for tests that it considers to be “medically necessary.” The majority of ordered tests are considered medically necessary dependent upon the patient’s diagnosis. If your physician provides a diagnosis that Medicare accepts for the ordered testing, the fee is paid by Medicare. If the provided diagnosis is not associated with the ordered test, Medicare denies payment. Additionally, Medicare doesn’t pay for tests considered to be screenings or physicals (checking for a condition when no signs or symptoms exist). Some tests have limitations on how often they can be performed, and Medicare will only pay for a certain quantity in a specified time frame.

Why perform a test if Medicare says it isn’t “medically necessary”?

Your doctor has made a medical judgment that you need the test. When your doctor says a test is medically necessary, he or she has considered your personal medical history, medications prescribed, and generally accepted medical practices. When Medicare indicates a test isn’t medically necessary, it’s not making a medical decision about your health: it’s functioning as an insurance company, determining appropriate coverage.

Will I be billed automatically?

No. After the Laboratory performs the test, we’ll ask Medicare to pay for it. If Medicare does pay for it, you will be billed for deductible and co-insurance balances only. You will be billed for the total only if Medicare denies the claim.

Will supplemental insurance pay for the test if Medicare doesn’t?

Probably not. Most supplemental insurance policies (sometimes called “Medigap” policies) follow the coverage guidelines set forth by Medicare. Medicaid also follows the Medicare guidelines and there is a high probability they will not cover the testing.

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