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M38 Remark Code: Patient Liable Under Signed Notice

M38 is an alert that the patient is responsible for the charges. They were informed in writing, before the service, that the payer would not pay, and they agreed to be responsible.

Quick facts

Code
M38 (RARC M38)
Status
Active In use since January 1, 1997; last modified July 1, 2015.
Code set
Remittance Advice Remark Codes (RARC)
Group codes
  • PR (Patient Responsibility): The amount is the patient's responsibility because a valid advance written notice was signed.
Official description
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 pay for it and the patient agreed to be responsible for the charges.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What M38 means

M38 is the outcome providers want when a service is likely to be denied. Before the service, the patient received a written notice explaining that the payer would probably not pay, and they agreed in writing to pay themselves. The payer has denied the service and confirms that liability shifts to the patient.

For Medicare, the notice is typically the Advance Beneficiary Notice of Noncoverage (ABN), and the claim line carries the GA modifier. Group code PR on the line reflects the patient’s responsibility.

What to do

  1. Confirm the line shows PR and matches the service on the signed notice.
  2. Bill the patient for the amount shown, following your normal statement process.
  3. Keep the signed notice available for patient questions or payer audits.
  4. Consider an appeal only if you believe the service should have been covered after all; the patient can also appeal.

M38 confirms your front-end process worked. Compare it with M39 and N563, which indicate the notice was defective or missing. See authorization and referral denials for building those checks into scheduling.

Codes that may appear with M38

  • CO-50 (These are non-covered services because this is not deemed a 'medical necessity' by the payer.): The service was not considered medically necessary, and the patient accepted liability in advance.
  • CO-96 (Non-covered charge(s).): The service was non-covered, with patient liability established by the notice.
  • PR-204 (This service/equipment/drug is not covered under the patient's current benefit plan): The service is not covered under the patient's current benefit plan.
  • 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 notice did not meet program requirements, so the patient is not liable.
  • N563 (Alert: Missing required provider/supplier issuance of advance patient notice of non-coverage.): No advance notice was issued, so the patient is not liable.
  • M27 (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 patient is relieved of liability and the provider is liable.

M38 FAQ

Can I now bill the patient?

Yes. M38 confirms patient liability. Bill the patient according to the notice they signed.

Which modifier tells Medicare an advance notice is on file?

The GA modifier indicates a valid advance beneficiary notice was obtained. Without it, the payer may not apply patient liability.

Should I keep the signed notice?

Yes. Retain it in the record in case the patient disputes the bill or the payer requests it.