Skip to main content

N246 Remark Code: State Patient Payment Limits Apply

N246 means state regulations limit how much the patient can be required to pay for this service. The provider must keep patient billing within those state limits, regardless of the difference between the charge and the payment.

Quick facts

Code
N246 (RARC N246)
Status
Active In use since December 2, 2004.
Code set
Remittance Advice Remark Codes (RARC)
Group codes
  • PR (Patient Responsibility): The patient's responsibility is limited to what state rules allow, which is usually what the payer reports under PR.
  • CO (Contractual Obligation): Amounts above the state limit are generally the provider's adjustment and cannot be billed to the patient.
Official description
State regulated patient payment limitations apply to this service.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What N246 means

Many states restrict what patients can be charged in certain situations: emergency care from out-of-network providers, services under state-regulated health plans, workers’ compensation, or state programs. N246 signals that a limit of this kind applies to the service. The provider’s ability to collect the unpaid balance from the patient is constrained by state rules.

N246 frequently appears on paid lines with CARC 45 (charge exceeds allowed amount) and ordinary cost-sharing codes. It does not usually indicate an error.

Common situations

  • An out-of-network provider treated a patient under a state balance billing protection.
  • The patient’s plan is state regulated and the service falls under a surprise billing law.
  • A workers’ compensation or state fee schedule limits charges to the patient.
  • A state program restricts cost-sharing for certain services or populations.

What to do

  1. Post the payment and treat the patient responsibility as limited to the PR amounts on the remittance.
  2. Write off amounts above the allowed limit rather than transferring them to the patient.
  3. Review whether a statement already sent to the patient exceeded the limit, and correct or refund as needed.
  4. If you disagree with the payment amount, look for any state-established dispute or arbitration process instead of billing the patient.
  5. Consult your compliance team when you’re unsure which state rule applies.

How to prevent it

Configure patient statements to draw only from PR adjustments, and flag claims carrying N246 or similar balance billing alerts so staff don’t manually move balances to patients. Keep a reference of the state laws that commonly affect your specialty and locations.

Codes that may appear with N246

  • CO-45 (Charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement.): The charge exceeds the allowed amount; state rules may bar balance billing the difference.
  • PR-2 (Coinsurance Amount): Coinsurance applied, which may be capped by state rules.
  • PR-3 (Co-payment Amount): A copayment applied within the state-regulated limit.
  • N858 (Alert: State regulations relating to an Out of Network Medical Emergency Care Act were applied to the processing of this claim.): Alert that state out-of-network emergency care law was applied to the claim.
  • N830 (Alert: The charge[s] for this service was processed in accordance with Federal/ State, Balance Billing/ No Surprise Billing regulations.): Alert that federal or state balance billing rules were applied.
  • MA13 (Alert: You may be subject to penalties if you bill the patient for amounts not reported with the PR (patient responsibility) group code.): Alert about penalties for billing the patient amounts not reported under PR.

N246 FAQ

Which state laws does N246 refer to?

The remark does not name them. It might be a balance billing protection, a workers' compensation fee rule, a Medicaid cost-sharing limit, or another state law. The payer or your state regulator can clarify.

Can I bill the patient the difference between my charge and the allowed amount?

Not if a state law limits patient payment for this service. Bill only what the payer reports as patient responsibility, unless state law clearly allows otherwise.

What if I'm out of network?

Many state protections apply to out-of-network providers too, especially for emergency care. Out-of-network status does not by itself permit balance billing.