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N124 Remark Code: Lesser Item Paid, Patient Liable

N124 means the payer denied the service or item, or paid only for a less extensive one, because the records did not show a need for the more extensive version. The patient is liable for the difference because they were told in writing before delivery that it would not be paid and agreed to pay.

Code: N124 (RARC N124)
Status: Active In use since September 26, 2002.
Code set: Remittance Advice Remark Codes (RARC)
Group codes: PR (Patient Responsibility): The unpaid portion is the patient's responsibility because a valid written notice was given and accepted before the service or item was furnished.
Official description: Payment has been denied for the/made only for a less extensive service/item because the information furnished does not substantiate the need for the (more extensive) service/item. The patient is liable for the charges for this service/item as you informed the patient in writing before the service/item was furnished that we would not pay for it, and the patient agreed to pay.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified: September 24, 2026 against the official X12 list.

What N124 means

N124 is a downgrade with a notice on file. The payer reviewed the claim and concluded the documentation supported something less than what was furnished, or nothing at all. Because the patient signed a written notice in advance, the payer places the unpaid amount on the patient rather than the provider.

It is most common with durable medical equipment, where a more extensive item was delivered than the payer considers necessary, but the wording covers services too.

Common causes

A deluxe or feature-rich item was supplied when a standard item would meet the documented need.
The order or medical records did not explain why the more extensive service was required.
The claim showed the notice modifier, so the payer assigned patient liability rather than provider liability.

What to do

Confirm the signed notice is on file, dated before delivery, and specific to this item or service.
Bill the patient for the amount the remittance shows as patient responsibility, with a statement that explains why.
Consider an appeal if the records do support the more extensive item; add physician documentation of need.
Keep the notice available in case the patient disputes the bill.

How to prevent it

Collect clear physician documentation for why a more extensive item or service is needed before furnishing it. When need is uncertain, explain the likely coverage to the patient and obtain the notice before delivery, as you did here. Tracking downgrade patterns by item helps target documentation training.

Codes that may appear with N124

CO-150 (Payer deems the information submitted does not support this level of service.): The information submitted does not support this level of service.
CO-50 (These are non-covered services because this is not deemed a 'medical necessity' by the payer.): The more extensive service or item was not considered medically necessary.
CO-169 (Alternate benefit has been provided.): An alternate, less extensive benefit was provided.

N125 (Payment has been (denied for the/made only for a less extensive) service/item because the information furnished does not substantiate the need for…): The same finding without valid patient notice, so any amount collected must be refunded.
N108 (Missing/incomplete/invalid upgrade information.): Flags missing or invalid upgrade information on the claim.
N172 (The patient is not liable for the denied/adjusted charge(s) for receiving any updated service/item.): Says the patient is not liable for the upgraded service or item.

N124 FAQ

What notice satisfies N124?

A written notice given before the item or service was furnished, explaining that the payer would likely not pay and signed by the patient agreeing to pay. For Medicare, that is typically the Advance Beneficiary Notice of Non-coverage.

How much can I collect from the patient?

The amount the payer assigned to patient responsibility on the remittance. Do not bill more than the adjustment shown.

Can I still appeal?

Yes. If the records support the more extensive item, an appeal could get it paid, and any amount the patient paid would then need to be adjusted or refunded.

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