Today’s healthcare system is a fickle beast, and the challenges of navigating the payor system can be overwhelming. But you can always get paid for what you do. If you ever write a charge off to a zero balance, you are not taking full advantage of the rules that exist to get paid. Consult with your billing department and spot check your EOBs to make sure they aren’t writing off patient balances. This is where understanding the rules that govern the financial waivers of liability is crucial.


A financial waiver of liability is an informed consent document you use when you expect a patient’s insurance will not cover a procedure or durable medical equipment (DME) such as eyeglass frames and lenses. The document informs the patient prior to a procedure being performed or materials ordered that they may be financially liable for the costs should the carrier deny the claim. The patient must provide consent by signature and accept financial responsibility for you to proceed. The carrier can then legally and properly transfer the financial liability to the patient, so you don’t have to write off a balance that you had a right to collect.

The form you use is incredibly important, as failure to use the right one prevents you from collecting from the patient should a claim be denied. Medicare Part B requires an advanced beneficiary notice (ABN) form, and you must use Medicare’s specific form, found at Medicare Advantage Plans (Medicare Part C) have their own forms with distinct and separate rules. For commercial payors, the Medicare Part B ABN form works if you remove the word Medicare and substitute “your medical insurance carrier.” This allows you to properly submit claims to any commercial medical carrier and preserve your payment rights.


Once the patient completes the ABN, add it to the patient record. Notify the carrier on a claim-by-claim basis that you have a completed ABN form by using modifiers on the specific procedure or DME in question. Four common modifiers can be appended to the CPT codes—either as a requirement by Medicare or voluntarily:

Modifier GA: ABN issued as required by payer policy, individual case. This is used to report that a required ABN was issued and filed for a service. CMS will assign financial liability to the beneficiary should the services be denied. 

Modifier GX: Notice of liability issued, voluntary under payer policy. This reports that a voluntary ABN was issued for a service that is statutorily excluded from Medicare reimbursement. Medicare will reject non-covered services appended with GX and assign liability to the beneficiary. Since this is a voluntary ABN, the patient always has financial responsibility for the procedure or test being conducted.

Modifier GZ: Item or service expected to be denied as not reasonable and necessary. This reports that an ABN was not issued. CMS will automatically deny these services and indicate the beneficiary is not responsible for payment. Without an ABN prior to performing the service, you cannot bill the patient.

Modifier GY: Item or service statutorily excluded or does not meet the definition of any Medicare benefit. This reports when a service is specifically excluded by Medicare and an ABN was not issued. CMS will deny these claims and the beneficiary will be totally responsible for all financial liability. 

Modifiers GA and GZ are often used if a procedure doesn’t meet medical necessity as determined by a Medicare local or national coverage determination. Modifiers GX and GY are for items or services statutorily excluded from the Medicare program. Here, an ABN is optional, but provides proof the beneficiary understands he will be liable for payment. When using either modifier, the provider should bill the patient for the services provided.

Today’s private practice faces many challenges—getting paid shouldn’t be one of them. Follow the rules and get paid 100% of the time for 100% of what you do. You’ve earned it.

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