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N406 Remark Code: Recipient's Insurer Must Pay First

N406 means the service is covered by this payer only when the recipient's insurance does not provide coverage. It typically appears when a living donor's own plan is billed for donation costs that the organ or tissue recipient's plan is expected to pay.

Quick facts

Code
N406 (RARC N406)
Status
Active In use since August 1, 2007.
Code set
Remittance Advice Remark Codes (RARC)
Group codes
  • OA (Other Adjustment): The payer is redirecting the charge to the recipient's coverage. Treat the amount as unresolved rather than as the donor's or recipient's debt.
  • CO (Contractual Obligation): Where a payer reports it as a contractual denial, the provider should pursue the recipient's plan and not bill the donor for the balance.
Official description
This service is only covered when the recipient's insurer(s) do not provide coverage for the service.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What N406 means

In transplant billing there are two people and often two health plans: the recipient who receives the organ or tissue, and the donor who gives it. N406 comes from a plan that sees itself as secondary for this service and wants the recipient’s insurer to respond first. It is common on donor evaluation, procurement, and donor follow-up care that was billed under the donor’s own policy.

Expect N406 alongside CARC 22 or CARC 109. The message is about payment order, not whether the care was appropriate.

Why it happens

Transplant benefits in many plans are structured so that the recipient’s coverage pays reasonable donor expenses. When a donor’s claim goes to the donor’s plan instead, that plan returns N406. Other triggers include:

  • The transplant program’s billing rules were not applied, and donor charges were billed like a routine visit.
  • The recipient’s plan was billed, but its decision was not forwarded to the donor’s plan.
  • Donor services were billed after the recipient’s plan changed, and nobody verified the new coverage.

What to do

  1. Identify the recipient’s plan through the transplant coordinator and confirm the benefit covers donor services on these dates.
  2. Submit the donor charges to the recipient’s insurer following its donor billing instructions, which may require the recipient’s member ID alongside the donor’s identity.
  3. If the recipient’s plan denies or limits payment, return to the payer that issued N406 with that EOB and ask it to reconsider the balance.
  4. Replace the original claim with a corrected claim (resubmission code 7 and the original claim number) when the payer wants the other plan’s data added to the same claim.
  5. Contact the payer if you cannot determine the recipient’s coverage; ask what alternative proof it will accept.

How to prevent it

Set up transplant accounts so donor charges are flagged at registration and routed according to the transplant agreement or recipient benefits. Keep a single reference sheet per case listing both people’s plans and which one pays donor costs. The broader payer-order logic is covered in eligibility and COB denials.

Codes that may appear with N406

  • OA-22 (This care may be covered by another payer per coordination of benefits.): Coordination of benefits points to another payer; N406 names the recipient's insurer as that payer.
  • CO-109 (Claim/service not covered by this payer/contractor.): The claim went to the wrong payer; N406 explains that the recipient's coverage is expected to respond.
  • CO-96 (Non-covered charge(s).): A non-covered charge on the donor's plan, with N406 explaining the conditional nature of that non-coverage.
  • N405 (This service is only covered when the donor's insurer(s) do not provide coverage for the service.): The reverse case, where the donor's insurer must decline before this payer will consider the service.
  • N4 (Missing/Incomplete/Invalid prior Insurance Carrier(s)): Requests the prior carrier's EOB, which you may need to send once the recipient's plan has processed the claim.
  • CO-276 (Services denied by the prior payer(s) are not covered by this payer.): Used when services the prior payer denied are also not covered by this payer.

N406 FAQ

Why would a donor's own plan send N406?

Many health plans expect the transplant recipient's coverage to absorb donation expenses. The donor's plan is saying it will step in only if the recipient's plan does not cover those costs.

Do I need the recipient's permission to bill their plan?

Billing the recipient's plan for donor services is normally arranged through the transplant program. Follow your organization's consent and privacy procedures, and confirm the recipient's policy details through the transplant coordinator.

What documentation proves the recipient's plan won't pay?

An EOB or written denial from the recipient's insurer for the same donor services is the usual proof. Some payers also accept a letter confirming that the recipient's plan excludes donor costs.