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CO-307 Denial Code: Medicare Maximum Fair Price Refund

CO-307 is the Medicare Maximum Fair Price Standard Default Refund Amount adjustment. It's used only for the Medicare Drug Price Negotiation Program, on remittances to dispensing entities such as pharmacies for negotiated drugs, and a remark code explains the specific refund result.

Quick facts

Code
CO-307 (CARC 307)
Status
Active In use since March 1, 2025.
Code set
Claim Adjustment Reason Codes (CARC)
Group codes
  • CO (Contractual Obligation): The usual group. The adjustment reflects the refund calculation between the manufacturer's effectuation of the maximum fair price and the dispensing entity; it's not patient responsibility.
Official description
Medicare Maximum Fair Price Standard Default Refund Amount Adjustment. At least one Remark Code must be provided (may be comprised of either the NCPDP Reject Reason Code, or Remittance Advice Remark Code that is not an ALERT.) Usage: To be used only for the Medicare Drug Price Negotiation Program.
X12 Claim Adjustment Reason Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What CO-307 means

CARC 307 is the Medicare Maximum Fair Price Standard Default Refund Amount adjustment. X12 limits its use to the Medicare Drug Price Negotiation Program and requires at least one remark code (not an alert) to explain the result.

Under the program, Medicare negotiates a maximum fair price (MFP) for selected drugs. When a pharmacy or other dispensing entity dispenses one of those drugs to an eligible Medicare patient, the manufacturer must make the MFP available. In practice, that often means the pharmacy buys at its usual cost and later receives a refund for the difference. The standard default refund amount is generally the wholesale acquisition cost minus the MFP. CO-307 shows up on the remittance that reports that refund or explains why the amount differs.

This is a pharmacy code. It has nothing to do with medical claims or with patient cost-sharing.

Common causes

  • Standard refund issued for a selected drug dispensed at MFP.
  • Alternative calculation used instead of the standard default (N909).
  • No refund due because the drug was already purchased at MFP (N908) or the claim was 340B-eligible with a lower ceiling price (N907).
  • Refund delayed pending corrected Part D prescription drug event data (N911).

How to handle it

  1. Read the remark code to understand the refund outcome.
  2. Match the remittance to the original prescription claim and dispensing date.
  3. Compare the refund to your actual acquisition cost to see whether the pharmacy was made whole.
  4. Follow up with the manufacturer or the program’s designated support channel when a refund is missing, late, or calculated wrong.
  5. Keep records of each selected-drug claim and its refund for reconciliation and audits.

How to prevent problems

  • Keep accurate acquisition cost records for selected drugs.
  • Flag 340B claims correctly so refund eligibility is determined properly.
  • Reconcile refunds regularly against dispensing logs. An ERA Analyzer can isolate CO-307 lines so they’re easy to match.

Specialty notes

Community, specialty, and long-term care pharmacies that dispense selected Part D drugs are the main audience. Independent pharmacies with thin margins should watch refund timing closely, since delays affect cash flow.

Remark codes that may appear with CO-307

  • N909 (Refund amount has been calculated using a methodology that differs from the Standard Default Refund Amount calculation ((Wholesale Acquisition Cost…): The refund was calculated using a method other than the standard default refund amount.
  • N908 (No refund because this drug has been prospectively purchased at the maximum fair price.): No refund because the drug was bought at the maximum fair price up front.
  • N907 (No refund because this claim has been identified as 340B-eligible with a ceiling price lower than the maximum fair price.): No refund because the claim was identified as 340B-eligible with a ceiling price below the maximum fair price.
  • N911 (This claim cannot be reimbursed by the manufacturer until the Part D plan submits corrected prescription drug event data to CMS for maximum fair…): The manufacturer can't reimburse until the Part D plan corrects prescription drug event data.
  • CO-295 (Pharmacy Direct/Indirect Remuneration (DIR)): Pharmacy direct and indirect remuneration, another pharmacy-specific adjustment.
  • CO-90 (Ingredient cost adjustment.): Ingredient cost adjustment on a pharmacy claim.
  • CO-91 (Dispensing fee adjustment.): Dispensing fee adjustment on a pharmacy claim.
  • CO-A1 (Claim/Service denied.): A general denial, used only when no more specific code applies.

CO-307 FAQ

What is the Maximum Fair Price?

It's the price negotiated between Medicare and a drug manufacturer under the Medicare Drug Price Negotiation Program created by the Inflation Reduction Act. Manufacturers must make the maximum fair price available to dispensing entities for eligible Medicare patients.

What is the Standard Default Refund Amount?

It's the default refund calculation for making the dispensing entity whole, generally based on the drug's wholesale acquisition cost minus the maximum fair price. Remark N909 explains when a different method was used.

Who receives remittances with CO-307?

Dispensing entities, mainly pharmacies, that dispense selected drugs to Medicare Part D enrollees. Physician practices billing medical claims shouldn't see it.

What should a pharmacy do with CO-307?

Read the remark code, match the refund to the original prescription claim, and reconcile it against the pharmacy's acquisition cost. Contact the manufacturer or the program's support channel if the refund is missing or wrong.