DENIAL CODES

Denial code N877

Remark code N877 indicates an initial payment under the No Surprises Act, allowing providers to negotiate for a higher out-of-network rate if desired.

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What is Denial Code N877

Remark code N877 is an alert indicating that the initial payment has been made in compliance with the No Surprises Act. This code informs the provider or facility that they have the option to initiate open negotiation if they wish to negotiate a higher rate for out-of-network services.

Common Causes of RARC N877

Common causes of code N877 are:

1. The healthcare provider or facility billed for services that were provided to a patient with out-of-network benefits, and the payer has processed the claim in accordance with the No Surprises Act.

2. The initial payment or notice of denial is issued as part of the new regulatory requirements aimed at protecting consumers from unexpected medical bills for out-of-network services.

3. The claim involves services that potentially qualify under the No Surprises Act, prompting the payer to apply specific provisions of the act, including an initial payment or denial notice.

4. There may have been a lack of a pre-established agreement on the reimbursement rate between the healthcare provider or facility and the insurance payer for the out-of-network services rendered.

5. The code is applied as a notification to the provider or facility that, although an initial payment has been made, there is an opportunity to negotiate a higher reimbursement rate for the out-of-network services provided.

Ways to Mitigate Denial Code N877

Ways to mitigate code N877 include implementing a proactive approach to managing out-of-network claims in accordance with the No Surprises Act. This involves establishing a dedicated team or assigning a specific role within your revenue cycle management department to monitor such claims and initiate open negotiations promptly. Training this team on effective negotiation strategies and ensuring they have access to up-to-date information on usual and customary rates for services can empower them to negotiate more favorable rates. Additionally, leveraging technology to identify claims subject to the No Surprises Act and automate the negotiation initiation process can streamline operations and improve outcomes. Establishing clear communication channels with payers and developing standardized procedures for initiating negotiations can also facilitate a more efficient and effective process.

How to Address Denial Code N877

The steps to address code N877 involve initiating an open negotiation process if the provider or facility seeks a higher out-of-network rate than what was initially offered. Begin by reviewing the payment against the services provided to ensure the initial payment aligns with the expected out-of-network rates based on the complexity and nature of the services rendered. If a discrepancy is found or if the payment is deemed insufficient, prepare a detailed comparison highlighting the difference between the received payment and the expected payment, including any relevant documentation or evidence supporting the higher rate request.

Next, contact the payer using the designated communication channels for negotiation under the No Surprises Act, often outlined in the initial payment notification or the payer's provider services information. It's crucial to adhere to any specified timelines for initiating negotiations to ensure compliance with the Act's requirements.

During the negotiation process, clearly articulate the reasons for the requested rate adjustment, leveraging any applicable data on standard rates for similar services in the geographical area or within the same specialty. Be prepared to engage in a back-and-forth discussion, providing additional information as requested by the payer.

If the negotiation reaches an impasse, consider utilizing the independent dispute resolution (IDR) process as outlined in the No Surprises Act. This involves submitting the dispute to an impartial third party for a binding decision. Ensure all required documentation and evidence supporting the claim for a higher rate are meticulously prepared and submitted according to the IDR process guidelines.

Throughout this process, maintain detailed records of all communications, documentation, and evidence submitted or received, as these records will be crucial in case of further disputes or for future reference.

CARCs Associated to RARC N877

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