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M40 Remark Code: Must Be Assigned, Billed by Employer

M40 means the claim was not paid because this practitioner's services must be billed by their employer and must be on an assigned claim. The practitioner cannot bill or receive payment directly.

Quick facts

Code
M40 (RARC M40)
Status
Active In use since January 1, 1997.
Code set
Remittance Advice Remark Codes (RARC)
Group codes
  • CO (Contractual Obligation): The line is unpaid as billed. The employer must submit the claim; the patient is not billed.
Official description
Claim must be assigned and must be filed by the practitioner's employer.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What M40 means

Some practitioners are not allowed to bill independently under a payer’s rules. Their services must be billed by the organization that employs or contracts with them, and the claim must be assigned so the payment goes to that entity. M40 says one of those conditions was not met: the practitioner billed under their own number, or the claim was unassigned.

It is a Medicare-rooted remark. Which practitioner types it affects depends on current program rules and the payer.

Common causes

  • The practitioner billed with their individual NPI as the billing provider.
  • The employer’s group had not been set up to receive reassigned benefits.
  • Box 27 indicated the claim was not assigned.
  • The practitioner changed employers and the reassignment was not updated.

How to fix it

  1. Confirm who must bill for this practitioner under the payer’s rules.
  2. Check enrollment and reassignment so the practitioner is linked to the employer.
  3. Submit the claim from the employer, with the employer as billing provider (box 33, 33a), the practitioner as rendering provider (box 24J), and assignment accepted.
  4. Void the original if the payer requires it.

How to prevent it

Map each practitioner type to its allowed billing arrangement and verify reassignment before the first claim. See provider enrollment denials for more on enrollment and reassignment.

Codes that may appear with M40

  • CO-16 (Claim/service lacks information or has submission/billing error(s).): The claim has billing information errors, here the wrong billing entity or assignment.
  • CO-185 (The rendering provider is not eligible to perform the service billed.): The rendering provider is not eligible to perform or bill the service as submitted.
  • CO-B7 (This provider was not certified/eligible to be paid for this procedure/service on this date of service.): The provider was not eligible to be paid for this service on this date.
  • N290 (Missing/incomplete/invalid rendering provider primary identifier.): The rendering provider identifier is missing or invalid.
  • MA09 (Alert: Claim submitted as unassigned but processed as assigned in accordance with our current assignment/participation agreement.): An unassigned claim was processed as assigned under the participation agreement.
  • CO-8 (The procedure code is inconsistent with the provider type/specialty (taxonomy).): The procedure is inconsistent with the provider type or specialty.

M40 FAQ

Which practitioners does M40 apply to?

Practitioners whose services, under the payer's rules, can only be paid to an employer or contracting entity. The specific provider types vary by payer and have changed over time for Medicare.

What does assigned mean?

The provider accepts the payer's allowed amount and receives payment directly. Assignment is indicated in box 27 of the CMS-1500.

Can I fix this with a corrected claim?

Usually the employer submits a new claim under its billing NPI and tax ID, listing the practitioner as the rendering provider.