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M36 Remark Code: 11th Rental Month Held for Option

M36 means the payer is holding payment for the 11th rental month of this equipment. It will not pay until you show that the patient was given the option of changing the rental to a purchase.

Quick facts

Code
M36 (RARC M36)
Status
Active In use since January 1, 1997.
Code set
Remittance Advice Remark Codes (RARC)
Group codes
  • CO (Contractual Obligation): The rental month is unpaid until the supplier supplies the purchase option information. It is not billed to the patient.
Official description
This is the 11th rental month. We cannot pay for this until you indicate that the patient has been given the option of changing the rental to a purchase.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What M36 means

M36 is the enforcement step that follows M9. In the tenth rental month, the payer alerts the supplier to offer the patient a choice between continued rental and purchase. If the eleventh month arrives without evidence that the choice was offered, the payer holds that month’s payment and reports M36.

It is a Medicare DME remark tied to capped rental rules and is rarely seen outside that setting.

Common causes

  • The supplier never contacted the patient about the purchase option after the M9 alert.
  • The patient was offered the option, but the claim did not carry the required indicator.
  • A change in suppliers meant the new supplier was unaware of the rental month count.
  • Billing software sent the 11th month automatically without a check.

How to fix it

  1. Contact the patient if the option has not been offered, and document their decision in writing.
  2. Add the required indicator or documentation to the claim as the payer directs.
  3. Resubmit the 11th month as a corrected claim with resubmission code 7 or a new claim, depending on how it was returned.
  4. Update subsequent months to reflect the patient’s choice.

How to prevent it

Set a task in your rental workflow when M9 appears so the patient is contacted before the next claim goes out. Rental month counts per item should be visible on every DME account. For broader context on remark code pairs, see CARC and RARC denial analysis.

Codes that may appear with M36

  • CO-16 (Claim/service lacks information or has submission/billing error(s).): Information needed to pay the month, the purchase option indicator, is missing.
  • CO-252 (An attachment/other documentation is required to adjudicate this claim/service.): Documentation of the patient's election may be required.
  • M9 (Alert: This is the tenth rental month.): The tenth-month alert telling the supplier to offer the purchase option.
  • N160 (The patient must choose an option before a payment can be made for this procedure/ equipment/ supply/ service.): The patient must choose an option before payment can be made.
  • M10 (Equipment purchases are limited to the first or the tenth month of medical necessity.): Purchases are limited to the first or tenth month of medical necessity.

M36 FAQ

How do I show the option was offered?

Follow the payer's instruction, which may be a specific modifier, claim indicator, or documentation of the patient's written election. Check the DME contractor's billing guidance for the item category.

What if the patient chose to keep renting?

Report that election as the payer instructs and resubmit the month. The option only needs to be offered, not accepted.

Does M36 still apply to current Medicare rentals?

The remark reflects a purchase option rule used for certain capped rental items. Rules have changed over time, so confirm whether it applies to the item and date of service.