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N16 Remark Code: Out-of-Pocket Maximum Met

N16 means the member's or family's out-of-pocket maximum has been met, so the payer paid the claim at a higher percentage, often reducing or eliminating the patient's coinsurance for this service.

Quick facts

Code
N16 (RARC N16)
Status
Active In use since January 1, 2000.
Code set
Remittance Advice Remark Codes (RARC)
Group codes
  • CO (Contractual Obligation): Contractual reductions still apply as usual. N16 only affects how much of the allowed amount the plan pays.
  • PR (Patient Responsibility): Any remaining patient responsibility is usually small or zero once the out-of-pocket maximum is met, depending on plan design.
Official description
Family/member Out-of-Pocket maximum has been met. Payment based on a higher percentage.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What N16 means

Health plans cap the amount a member (or a family) pays in cost-sharing during a plan year. Once that cap is reached, the plan pays covered services at a higher rate, frequently 100 percent of the allowed amount. N16 tells you this claim was processed after the cap was reached, which is why the plan’s payment is higher and the patient’s share is lower than you might expect.

Unlike the many N-codes that report missing information, N16 is purely informational. It usually appears on paid lines alongside CARC 45 and reduced cost-sharing codes.

Common causes

  • The patient has had significant medical expenses earlier in the plan year.
  • Other family members’ costs contributed to a family out-of-pocket maximum.
  • A large claim processed just before this one pushed the member past the limit.

What to do

  1. Post the payment as reported. The higher plan payment is correct if it matches the allowed amount and plan percentage.
  2. Recheck the patient balance. Reduce or remove any estimated cost-sharing you billed or collected.
  3. Issue credits or refunds where the patient paid more than the remittance now assigns.
  4. Update estimates. For the rest of the plan year, cost estimates for this patient should reflect the met maximum.

How to prevent it

There is nothing to prevent, but you can avoid collecting too much at the front desk. Checking accumulators in real-time eligibility responses before collecting coinsurance helps, especially late in the plan year for patients with high medical use.

Codes that may appear with N16

  • CO-45 (Charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement.): The standard contractual reduction can still appear on a line paid at the higher percentage.
  • PR-2 (Coinsurance Amount): Coinsurance may drop to zero or near zero because the out-of-pocket limit was reached.
  • N549 (Alert: Patient's calendar year out-of-pocket maximum has been met.): Alert that the patient's calendar-year out-of-pocket maximum has been met.
  • N7 (Alert: Processing of this claim/service has included consideration under Major Medical provisions.): Alert that the claim was processed under major medical provisions, another reason cost-sharing changes.
  • N23 (Alert: Patient liability may be affected due to coordination of benefits with other carriers and/or maximum benefit provisions.): Alert that patient liability may change due to coordination of benefits or maximum benefit provisions.
  • PR-1 (Deductible Amount): Deductible amount. Some plans count it toward the out-of-pocket maximum.

N16 FAQ

Does N16 mean the patient owes nothing?

Often, for covered in-network services, but not always. Some plans exclude certain costs, such as out-of-network charges or non-covered services, from the out-of-pocket maximum. Read the PR amounts on the remittance.

Should I refund the patient's copay?

If you collected cost-sharing at the visit and the remittance now shows little or no patient responsibility, the difference is typically a credit to the patient. Follow your refund policy and any applicable rules.

Does the maximum reset?

Yes, usually each plan year. Claims for the next plan year will apply cost-sharing again until the limit is reached.