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N172 Remark Code: Patient Not Liable for Upgraded Item

N172 means the patient is not liable for the denied or adjusted charges for receiving an upgraded service or item. The supplier or provider cannot bill the patient for the upgrade portion that the payer did not pay.

Quick facts

Code
N172 (RARC N172)
Status
Active In use since February 28, 2003.
Code set
Remittance Advice Remark Codes (RARC)
Group codes
  • CO (Contractual Obligation): The unpaid upgrade amount is the provider's liability and cannot be collected from the patient.
Official description
The patient is not liable for the denied/adjusted charge(s) for receiving any updated service/item.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What N172 means

An upgrade is an item or service with more features than the payer considers medically necessary. Normally the payer covers the standard version and, with proper advance notice, the patient pays the difference. N172 tells you that did not happen here: the payer found the patient cannot be charged for the upgrade.

It is closely related to N124 and N125, which describe the patient-liable and refund-required outcomes for less extensive items.

Common causes

  • No advance notice was given before the upgrade was furnished.
  • A notice was given but was defective, such as unsigned, undated, or too general.
  • The claim lacked the modifier showing that a notice was on file.
  • The upgrade was supplied at the supplier’s choice, not the patient’s request.

What to do

  1. Review the account for any patient payment toward the upgrade and refund it.
  2. Check the notice. If it was valid and the claim failed to report it, correct the claim so liability can be reassessed.
  3. Write off the upgrade difference if no valid notice exists.
  4. Document the outcome for your compliance records.

How to prevent it

Obtain and file a valid advance notice whenever a patient requests an upgraded item, before delivery. Configure billing so upgrade lines cannot be released without the appropriate modifiers and a scanned notice. Training delivery staff to spot upgrade requests is the simplest safeguard.

Codes that may appear with N172

  • CO-150 (Payer deems the information submitted does not support this level of service.): The information does not support the level of service or item furnished.
  • CO-169 (Alternate benefit has been provided.): An alternate benefit was paid for the standard item.
  • CO-50 (These are non-covered services because this is not deemed a 'medical necessity' by the payer.): The upgraded features were not considered medically necessary.
  • N108 (Missing/incomplete/invalid upgrade information.): Upgrade information on the claim was missing or invalid.
  • N124 (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…): The patient is liable for the upgrade because they agreed in writing before delivery.
  • 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…): Any amount collected for the upgrade must be refunded to the patient.

N172 FAQ

Why is the patient protected?

Usually because no valid advance notice was obtained, or the claim did not show that one was, so the payer does not permit the provider to collect the upgrade difference.

What if we did get a signed notice?

Check that it was valid and that the claim reported it correctly, such as with the right modifier. If the claim was wrong, correct it so liability can be reassessed.

What if the patient already paid?

Refund what they paid toward the upgrade portion. Keep a record of the refund.