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N425 Remark Code: Statutorily Excluded Service

N425 means the service is statutorily excluded: the law that defines the program's benefits does not cover it. No coding fix or documentation will make it payable, and the patient is typically responsible for the charge.

Quick facts

Code
N425 (RARC N425)
Status
Active In use since August 1, 2007.
Code set
Remittance Advice Remark Codes (RARC)
Group codes
  • PR (Patient Responsibility): Because the service is excluded by statute, the amount is generally the patient's responsibility, subject to your contract and any applicable program rules.
  • CO (Contractual Obligation): Occasionally reported as a provider adjustment. Check whether your contract or the program prohibits billing the patient before you do.
Official description
Statutorily excluded service(s).
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What N425 means

A statutory exclusion is written into the law that creates a program’s benefits. Medicare, for example, excludes certain categories of care by statute. When a payer reports N425, it is telling you the service falls into one of those categories. That is different from a medical necessity denial, which depends on the patient’s circumstances, or a policy limit, which the payer could change.

N425 most often explains CARC 96 (non-covered charge) or CARC 204 (not covered under the current benefit plan).

Why this matters for billing

Because the exclusion is statutory, the fix is not on the claim. What matters is:

  • Patient communication. Patients should know before the service that it will not be covered.
  • Secondary coverage. A supplemental or secondary plan might cover what the primary excludes. The primary denial is often needed to bill it.
  • Correct classification. Sometimes a service is excluded only in one form (for example, a routine version) and covered when there is a qualifying clinical reason. If the billed code or diagnosis did not capture that reason, the classification may be wrong.

What to do

  1. Confirm the service is truly excluded for this patient’s program and not simply miscoded. Review the procedure code, modifiers, and diagnosis.
  2. Correct and resubmit with resubmission code 7 if the coding misrepresented a covered service.
  3. Bill a secondary plan if the patient has one that may cover excluded services, with the primary’s remittance.
  4. Bill the patient when the exclusion applies, following your contract and any notice requirements.

How to prevent problems

Keep a list of commonly requested services that the programs you bill exclude by statute, and share it with front-desk and scheduling staff. Give patients a written cost estimate before excluded services. For how CARCs and remark codes combine on these denials, see how CARC and RARC codes work.

Codes that may appear with N425

  • CO-96 (Non-covered charge(s).): Non-covered charge; N425 explains that the exclusion comes from statute.
  • PR-204 (This service/equipment/drug is not covered under the patient's current benefit plan): The service is not covered under the patient's current benefit plan.
  • CO-49 (This is a non-covered service because it is a routine/preventive exam or a diagnostic/screening procedure done in conjunction with a…): A routine or screening service, a common category of statutory exclusion in some programs.
  • N429 (Not covered when considered routine.): Not covered when considered routine, which may be a policy rather than a statutory exclusion.
  • N383 (Not covered when deemed cosmetic.): Not covered when deemed cosmetic.
  • N130 (Consult plan benefit documents/guidelines for information about restrictions for this service.): Directs you to the plan's benefit documents for restrictions.

N425 FAQ

Do I need an ABN for a statutorily excluded service?

For Medicare, an ABN is not required for services that are statutorily excluded, though providers may issue one voluntarily to notify the patient. Other payers have their own notice rules, so check them.

Can I appeal N425?

An appeal rarely succeeds when the service truly falls under a statutory exclusion. Appeal only if you believe the payer classified the service incorrectly.

Should I still submit claims for excluded services?

Sometimes. A patient may need a denial for a secondary plan, or the patient may ask you to submit. Some programs also let providers append a modifier to indicate a service is expected to be denied; check the payer's guidance.