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N408 Remark Code: Prior Payer's Deductible Not Covered

N408 means this payer, usually a secondary plan, does not cover deductible amounts that a previous payer applied. The deductible assessed by the primary plan is not picked up, so that portion typically remains the patient's responsibility unless another plan covers it.

Code: N408 (RARC N408)
Status: Active In use since August 1, 2007.
Code set: Remittance Advice Remark Codes (RARC)
Group codes: PR (Patient Responsibility): The prior payer's deductible stays with the patient. It can generally be billed to the patient or to a further payer, subject to your contracts.
OA (Other Adjustment): Some payers show the prior payer's impact as an other adjustment. Read the paired CARC to see whether any part is patient responsibility.
Official description: This payer does not cover deductibles assessed by a previous payer.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified: September 24, 2026 against the official X12 list.

What N408 means

When two plans cover a patient, the primary processes the claim first and may apply its deductible. The secondary then decides how much of the leftover balance it will pay. N408 is the secondary plan saying it does not cover deductibles that a previous payer assessed.

You will usually see N408 with CARC 275 (prior payer’s patient responsibility not covered), often under group PR. This is a benefit design outcome, not a missing-information problem.

Why a secondary plan would decline the deductible

Coordination of benefits provisions vary widely. A secondary plan may:

Use a non-duplication or carve-out method that pays only up to what it would have paid as primary.
Exclude a primary plan’s deductible explicitly in its benefit terms.
Apply its own deductible first, so the primary’s deductible is absorbed into the patient’s share.

Which method applies depends on the patient’s plan documents. It is not something the provider can change on the claim.

What to do

Verify the posting. Confirm the amount carried by N408 matches the deductible on the primary payer’s EOB for the same lines.
Check the rest of the remittance to see what the secondary paid toward coinsurance or copays.
Look for a third payer. If the patient has tertiary coverage, bill that plan with both prior EOBs.
Bill the patient for the remaining deductible when your contracts and program rules allow. Explain on the statement that the secondary plan does not cover the primary’s deductible.
Request a review only if the patient’s benefit summary shows the secondary does cover prior-payer deductibles. Include the primary EOB and the relevant plan language.

How to prevent surprises

Verify both plans at intake and note whether the secondary plan covers prior-payer cost sharing. Patients who expect their second plan to cover everything appreciate hearing about this before the visit. For more on untangling payer order, read eligibility and COB denials.

Codes that may appear with N408

PR-275 (Prior payer's (or payers') patient responsibility (deductible, coinsurance, co-payment) not covered. (Use only with Group Code PR)): The prior payer's patient responsibility is not covered; N408 specifies that the uncovered piece is the deductible.
OA-23 (The impact of prior payer(s) adjudication including payments and/or adjustments. (Use only with Group Code OA)): Reflects the impact of the primary payer's adjudication on what this payer allows.
PR-1 (Deductible Amount): The deductible amount itself, which the primary plan applied and this plan declines to cover.

N4 (Missing/Incomplete/Invalid prior Insurance Carrier(s)): Asks for the prior payer's EOB when the secondary claim lacks it, a different problem from N408.
N23 (Alert: Patient liability may be affected due to coordination of benefits with other carriers and/or maximum benefit provisions.): An alert that patient liability may change because of coordination of benefits or benefit maximums.
CO-276 (Services denied by the prior payer(s) are not covered by this payer.): Covers services the prior payer denied outright, rather than a deductible it applied.

N408 FAQ

Can I bill the patient for the deductible after N408?

In most cases the primary plan's deductible is patient responsibility when the secondary plan declines it. Check your contracts and any state or program rules that limit billing, especially for Medicaid or dual-eligible patients.

Is N408 an error by the secondary payer?

Usually not. Some secondary plans, including certain supplemental and non-duplication plans, are designed not to pay a primary plan's deductible. If the patient's benefit documents say the plan does cover it, ask for a review.

Does N408 affect the rest of the secondary payment?

No. The secondary payer may still pay coinsurance or other balances on the claim. N408 only explains why the deductible portion was left unpaid.

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