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M138 Remark Code: Not Enrolled in the Demonstration

M138 means the payer's records link the patient to a demonstration project, but the patient was not enrolled in that demonstration on the date services were rendered. Because demonstration coverage applies only to enrolled participants, the service was not paid under it.

Code: M138 (RARC M138)
Status: Active In use since January 1, 1997.
Code set: Remittance Advice Remark Codes (RARC)
Group codes: CO (Contractual Obligation): The provider absorbs the amount, typically because the service was billed under demonstration rules that did not apply on that date.
PR (Patient Responsibility): The payer assigned the amount to the patient. Confirm the patient's regular coverage and any notice requirements before sending a bill.
Official description: Patient identified as a demonstration participant but the patient was not enrolled in the demonstration at the time services were rendered. Coverage is limited to demonstration participants.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified: September 24, 2026 against the official X12 list.

What M138 means

M138 is a mismatch between the claim and the patient’s demonstration enrollment dates. The payer recognises the patient as someone associated with a demonstration project, which is most often a Medicare demonstration, but its records show the patient was not enrolled on the day you provided the service. Since the demonstration only covers people enrolled at the time, the line was not paid under its rules.

The reason code on the same line tells you how the payer framed the outcome: a non-covered service, a date before coverage began, or a date after it ended.

Common causes

The service took place before the patient’s enrollment start date in the demonstration.
The patient had left the demonstration, or it ended, before the date of service.
Your system still carries a demonstration flag or billing setup from an earlier encounter.
Services were billed under demonstration rules for a patient who was never enrolled.
A date of service in box 24A was keyed incorrectly and falls outside the enrollment window.

How to fix it

Get the enrollment dates. Ask the payer or demonstration administrator for the patient’s participation start and end dates.
Check your dates of service. If a date in box 24A was wrong, correct it and send a replacement claim with resubmission code 7 in box 22 and the original claim number.
Bill regular coverage when appropriate. If the service is covered outside the demonstration, ask the payer how to have it processed under the patient’s standard benefits.
Dispute bad enrollment data. If you hold proof the patient was enrolled on that date, request a reopening or file an appeal with that proof attached.
Review patient liability. If the amount is PR, confirm it is truly the patient’s responsibility before billing.

How to prevent it

Verify demonstration participation at every visit, not just the first one, and clear demonstration flags from the patient’s account when their participation ends. Eligibility checks catch most of these problems before the claim goes out; see eligibility and coordination of benefits denials.

Codes that may appear with M138

CO-96 (Non-covered charge(s).): A non-covered charge adjustment is a common way payers report a service that fell outside demonstration coverage.
PR-27 (Expenses incurred after coverage terminated.): Appears when the service date falls after the patient's demonstration participation ended.
PR-26 (Expenses incurred prior to coverage.): Appears when the service date falls before the patient's demonstration enrollment began.

M139 (Denied services exceed the coverage limit for the demonstration.): The patient is enrolled, but the services exceed the demonstration's coverage limit.
M137 (Part B coinsurance under a demonstration project or pilot program.): Reports Part B coinsurance calculated under a demonstration or pilot program, not a denial.
N30 (Patient ineligible for this service.): A general statement that the patient is ineligible for the service, without the demonstration context.

M138 FAQ

What is a demonstration in this context?

Medicare and some other payers run time-limited demonstration or pilot programs that change coverage or payment for a defined group of enrollees. M138 says the patient was not part of that group on the service date.

Can I rebill the service under the patient's regular benefits?

Often yes, if the service is covered under the patient's standard plan. Ask the payer whether it can reprocess the line under regular coverage or whether you need to submit a corrected claim.

Who confirms the enrollment dates?

The payer or the demonstration administrator. Ask for the exact enrollment start and end dates so you can compare them with your dates of service.

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