Final answer:
CMS will accept the Advance Beneficiary Notice of Noncoverage (ABN) for either a "potentially non-covered" service or a statutorily excluded service. The ABN lets patients make informed decisions about their care when Medicare may not cover certain services. It is important in the context of moral hazard and adverse selection that can impact Medicare and Medicaid programs.
Step-by-step explanation:
CMS will accept the Advance Beneficiary Notice of Noncoverage (ABN) for either a "potentially non-covered" service or for a statutorily excluded service. An ABN is a written notice that a provider gives to a Medicare beneficiary before items or services are furnished when the provider believes that Medicare may not pay for it. This process is important because it allows patients to make an informed decision about their care and understand their financial responsibilities should Medicare deny the claim.
Understanding this procedure is vital due to concerns such as moral hazard and adverse selection, which can affect the Medicare system. These economic principles describe situations where insured individuals may engage in riskier behavior because they do not bear the full cost, or when individuals with higher risks are more likely to purchase insurance, respectively.
The Patient Protection and Affordable Care Act (ACA or Obamacare) implemented various reforms aimed at reducing the prevalence of such issues, and the fee-for-service model often used in conjunction with Medicare and Medicaid programs is an example of healthcare reimbursement affected by these phenomena.