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CO-241 Code: Low Income Subsidy (LIS) Co-payment

CO-241 reports the Low Income Subsidy (LIS) co-payment amount. It is used mainly on Medicare Part D pharmacy claims to show the reduced co-payment that applies because the beneficiary qualifies for Extra Help.

Code: CO-241 (CARC 241)
Status: Active In use since June 3, 2012.
Code set: Claim Adjustment Reason Codes (CARC)
Group codes: CO (Contractual Obligation): The amount relates to the LIS co-payment and is reported for the provider's reconciliation. The pharmacy should collect only the subsidized co-payment from the patient.
PR (Patient Responsibility): Used when the payer reports the LIS co-payment as the amount the beneficiary owes.
Official description: Low Income Subsidy (LIS) Co-payment Amount
X12 Claim Adjustment Reason Codes, retrieved September 25, 2026
Last verified: September 24, 2026 against the official X12 list.

What CO-241 means

CARC 241 is the Low Income Subsidy (LIS) co-payment amount. LIS, also called Extra Help, is a Medicare Part D program that reduces out-of-pocket drug costs for beneficiaries with limited income and resources. Beneficiaries who qualify pay a lower co-payment than the plan’s standard cost sharing.

CARC 241 lets a Part D plan or its processor report that LIS co-payment amount separately from standard cost sharing. That helps pharmacies and plans reconcile how much of the drug cost came from the beneficiary, how much the subsidy covered, and how much the plan paid.

This is essentially a pharmacy code. At the point of sale, pharmacies see LIS information in the NCPDP claim response; CARC 241 is how that amount is carried into remittance and reconciliation data.

When it appears

Part D prescription claims for beneficiaries enrolled in LIS.
Pharmacy remittances and reconciliation files from Part D plans or processors.
Encounter or reporting data where LIS cost sharing must be broken out.
Coordination with secondary coverage, such as a state pharmacy assistance program, where the secondary needs to see what the beneficiary owed after the subsidy.

How to handle it

Collect only the LIS co-payment returned by the plan for the claim. Charging the standard co-payment to an LIS beneficiary can lead to overcharging.
Reconcile the LIS amount with the plan’s payment to confirm the total matches the expected reimbursement.
If the LIS level seems wrong, for example the beneficiary shows a letter confirming Extra Help but the claim does not reflect it, follow the plan’s process for best available evidence and ask the plan to update the subsidy status.
Refund any overcharge if the patient paid more than the LIS co-payment after the status is corrected.

How to prevent problems

Verify LIS status through eligibility checks before or at dispensing.
Keep current records of each beneficiary’s Extra Help documentation.
Train pharmacy staff to recognize LIS indicators in claim responses.
Reconcile Part D remittances regularly so LIS amounts do not get posted as ordinary adjustments.

For general guidance on reading remittance codes, see how to read CARC and RARC codes.

Remark codes that may appear with CO-241

N751 (Adjusted because the patient is covered under a Medicare Part D plan.): The adjustment relates to the patient being covered under a Medicare Part D plan.

PR-3 (Co-payment Amount): The standard co-payment amount, not tied to a subsidy.
PR-2 (Coinsurance Amount): The coinsurance amount.
PR-1 (Deductible Amount): The deductible amount; LIS can also reduce or remove the Part D deductible.

CO-241 FAQ

What is the Low Income Subsidy?

It is the Medicare Part D Extra Help program, which lowers premiums, deductibles, and co-payments for people with limited income and resources.

Who sees CO-241?

Mainly pharmacies and pharmacy claim processors handling Medicare Part D prescriptions. Physician practices billing medical claims rarely encounter it.

How much should the pharmacy collect from an LIS patient?

Only the LIS co-payment the plan returns in its response for that claim. Amounts depend on the beneficiary's subsidy level and the drug tier, so rely on the plan's response rather than a fixed amount.

Does CO-241 mean the pharmacy was underpaid?

Not by itself. It shows the subsidized co-payment portion. Compare the plan payment plus the LIS co-payment with your contracted reimbursement to decide whether anything is missing.

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