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N194 Remark Code: TC Unpaid, Equipment Not Owned

N194 means the payer did not pay the technical component because the provider who billed it does not own the equipment used to perform the service. The technical component belongs to whoever owns or properly leases the equipment under the payer's rules.

Quick facts

Code
N194 (RARC N194)
Status
Active In use since February 25, 2003.
Code set
Remittance Advice Remark Codes (RARC)
Group codes
  • CO (Contractual Obligation): The technical charge was denied as the provider's responsibility. It should not be billed to the patient.
  • OA (Other Adjustment): Occasionally reported as an other adjustment where another entity is expected to bill the technical part.
Official description
Technical component not paid if provider does not own the equipment used.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What N194 means

The technical component of a diagnostic service pays for the equipment, supplies, and technician time. N194 says the payer will not pay that part to the billing provider because the equipment used belongs to someone else. The remark usually sits with CARC 170 or CARC B20.

This is different from N195, which only asks for a separate technical line. With N194, the provider is not entitled to the technical portion at all under the payer’s rules.

Common causes

  • A physician group billed globally for tests performed on a hospital’s or imaging center’s machine.
  • The practice uses mobile equipment owned by a vendor and billed the technical component itself.
  • A lease was not structured in a way the payer recognises as ownership.
  • The payer’s enrollment records do not show the practice as a supplier for that equipment type.

What to do

  1. Confirm who owns the equipment and under what arrangement it was used on the date of service.
  2. If you interpreted the study, resubmit the professional part with modifier 26, using a corrected claim with resubmission code 7 and the original claim number.
  3. Let the equipment owner know so it can bill the technical component, if appropriate.
  4. If your practice does own or qualify under a recognised lease, appeal with the purchase or lease documentation.

How to prevent it

Keep an equipment register showing ownership for each device used in billable services. For outside or mobile equipment, set charge capture to default to the professional component only. Review lease agreements with compliance advisers, since payer and regulatory rules on purchased and leased services can be strict.

Codes that may appear with N194

  • CO-170 (Payment is denied when performed/billed by this type of provider.): Payment is denied when performed or billed by this type of provider, used when the billing entity cannot claim the technical part.
  • CO-B20 (Procedure/service was partially or fully furnished by another provider.): The service was partly or fully furnished by another provider, such as the equipment owner.
  • CO-16 (Claim/service lacks information or has submission/billing error(s).): Billing information is in error, for example the wrong component or modifier.
  • N195 (The technical component must be billed separately.): The technical component must be billed separately, rather than not being payable at all.
  • N184 (Rebill technical and professional components separately.): Rebill technical and professional components separately.
  • M96 (The technical component of a service furnished to an inpatient may only be billed by that inpatient facility.): For inpatients, only the facility may bill the technical component.

N194 FAQ

Does leasing the equipment count as owning it?

Payers differ. Some accept certain lease arrangements, others require outright ownership or specific lease terms. Check the payer's policy and your lease documentation.

Can I still bill the professional component?

Yes, if your provider interpreted the test. Bill the professional part with modifier 26.

Who should bill the technical component?

Usually the entity that owns the equipment and employs the technical staff, such as the imaging center or hospital.