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M27 Remark Code: Patient Relieved, Provider Liable

M27 is an alert that the patient has been relieved of liability under the limitation of liability provision. The provider is liable for the waived charges, including coinsurance, because it knew or should have known the service was not covered.

Code: M27 (RARC M27)
Status: Active In use since January 1, 1997; last modified August 1, 2007.
Code set: Remittance Advice Remark Codes (RARC)
Group codes: CO (Contractual Obligation): The full non-covered amount, including what would have been coinsurance, is the provider's responsibility. Do not bill the patient.
Official description: Alert: The patient has been relieved of liability of payment of these items and services under the limitation of liability provision of the law. The provider is ultimately liable for the patient's waived charges, including any charges for coinsurance, since the items or services were not reasonable and necessary or constituted custodial care, and you knew or could reasonably have been expected to know, that they were not covered. You may appeal this determination. You may ask for an appeal regarding both the coverage determination and the issue of whether you exercised due care. The appeal request must be filed within 120 days of the date you receive this notice. You must make the request through this office.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified: September 24, 2026 against the official X12 list.

What M27 means

Medicare’s limitation of liability rules decide who pays when a service is denied as not reasonable and necessary or as custodial care. M27 says the patient is protected and the provider is not: Medicare concluded that you knew, or could reasonably have been expected to know, the service would not be covered. The patient’s charges, including coinsurance, are waived and you absorb them.

Typical triggers include prior warnings like M17, published coverage policies, or repeat services the payer has already denied for the same patient.

What to do

Stop patient billing for the line and refund anything already collected.
Review why the payer believes you should have known, for example a published policy or an earlier notice.
Appeal within the deadline if you disagree with either the coverage decision or the due care finding. The remark allows 120 days from receipt.
Update front-end processes so an advance beneficiary notice is given in similar cases.

Recurring M27 alerts usually mean ABN workflows are not being used where they should be. See authorization and referral denials for front-end controls that reduce this exposure.

Codes that may appear with M27

CO-50 (These are non-covered services because this is not deemed a 'medical necessity' by the payer.): The service was not reasonable and necessary.
CO-96 (Non-covered charge(s).): The service was non-covered, for example as custodial care.

M17 (Alert: Payment approved as you did not know, and could not reasonably have been expected to know, that this would not normally have been covered for…): The provider-favorable version: paid once because you could not have known, with a warning for next time.
M39 (Alert: The patient is not liable for payment of this service as the advance notice of non-coverage you provided the patient did not comply with…): The patient is not liable because the advance notice did not meet program requirements.
M38 (Alert: The patient is liable for the charges for this service as they were informed in writing before the service was furnished that we would not…): The patient is liable because they were properly informed in writing beforehand.

M27 FAQ

Can I appeal an M27 decision?

Yes. You can appeal both the coverage decision and the finding that you should have known. The remark sets a 120-day window from receipt of the notice, filed through the same office.

Can I collect coinsurance from the patient?

No. Under M27, the patient's charges are waived, including coinsurance. Refund anything already collected for the service.

How could I have avoided provider liability?

By giving the patient a valid advance beneficiary notice before the service when you expected it might not be covered.

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