Remittance Advice

Informational RAs are sent to nonparticipating physicians, suppliers, and non-physician practitioners billing non-assigned claims, unless the beneficiary or the provider requests that the remittance advice be suppressed. An informational RA is identical to other RAs, but must carry a standard message to notify providers that they do not have appeal rights beyond those afforded when limitation on liability. Information on nonassigned claims will be listed separately after the assigned claims.

In addition to the provider RAs, Medicare beneficiaries also receive Medicare Summary Notice (MSN).

The RA contains message codes which explain how a claim was processed. There are three different sets of codes that are used on the RA. Each group is explained below. 

Reason Codes
Reason codes are used to explain why a claim was not paid or how the claim was paid. They also show the reason for any claim financial adjustments, such as denials, reductions or increases in payment. Under the standard format, only reason codes approved by the ANSI X12.835 Insurance Subcommittee and Medicare specific supplemental messages approved by CMS may be used.

Medicare Specific Remark Codes and Messages
The X12.835 reason codes were created as generic messages to be used by all national health payers. Therefore, they are not specific to Medicare. CMS created appeals and developmental codes and messages specific to Medicare. CMS remark codes are informational messages that cannot be expressed with an ANSI reason code. These codes are service-specific.

Group Codes
Group codes will be used to indicate when a beneficiary may or may not be billed for the unpaid balance of the services that were performed. These codes correspond with information that is already being furnished to beneficiaries via MSNs. The group codes and their explanations follow:

PR (Patient Responsibility)
This signifies the amount that may be billed to the beneficiary or to another payer on the beneficiary’s behalf.

CO (Contractual Obligation)
This includes any amounts for which the provider is financially liable. The patient may not be billed for these amounts.

OA (Other Adjustment)
This is used if neither PR or CO is applied.

Explanation of Codes and Messages
The Remittance Advice will always provide the text of each reason and message code at the end of the notice. 

Adjustments
To help those providers who balance their billed amounts against the Medicare payments and adjustments, paid and adjusted amounts will be totaled at the end of the assigned claims listing.

Offsets
Offsets to payments, perhaps to satisfy a prior Medicare overpayment, will be shown as an adjustment from your payment at the summary level rather than as an adjustment against an individual claim in that remittance notice. The Financial Control Numbers (FCNs) that enable the provider to associate the offset with those claims and payments that led to the withholding or to identify the reason for the offset will also be shown. The provider should match the FCN number appearing on a RA with the FCN on any overpayment letters received to identify the beneficiary’s account in which the overpayment occurred.

Abbreviations
To make the most efficient use of space, abbreviations are used in the remittance advice.

 

Tip: Learn how to read your remittance advice from the "Remittance Advice (RA) Information - An Overview" (PDF, 471 KB) and the "Remittance Advice Resources and FAQs" (PDF, 638 KB) documents on the CMS website. Get a full list of the Reason and Remark codes by using the Reason/Remark Codes.

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