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N506 Remark Code: Estimate Only, Not Final Liability

N506 is an alert that the amounts shown are an estimate of the member's liability based on the information available when it was processed. Actual coverage and patient responsibility are determined when the claim is processed, and the estimate is not a pre-authorization and does not guarantee payment.

Quick facts

Code
N506 (RARC N506)
Status
Active In use since November 1, 2008.
Code set
Remittance Advice Remark Codes (RARC)
Group codes
  • PR (Patient Responsibility): The patient responsibility shown is an estimate. The final amount may be higher or lower once the claim is adjudicated.
Official description
Alert: This is an estimate of the member's liability based on the information available at the time the estimate was processed. Actual coverage and member liability amounts will be determined when the claim is processed. This is not a pre-authorization or a guarantee of payment.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What N506 means

N506 is a disclaimer attached to a real-time or pre-service estimate. It reminds you of three things:

  • The figures reflect what the payer knew at that moment.
  • Coverage and patient liability are decided only when the actual claim is adjudicated.
  • An estimate is neither a pre-authorization nor a promise to pay.

The alert requires no correction. It matters mostly for how you talk to patients and how you handle authorizations.

What to do

  1. Treat the estimate as a guide for point-of-service collection, not a final bill.
  2. Get any required authorization separately. See the authorization and referral prevention guide.
  3. Tell patients the amount may change, especially early in the plan year when deductibles are moving.
  4. Reconcile after the remittance posts, billing any balance or issuing refunds as your policy requires.

Tracking how often final patient responsibility differs from the estimate for each payer helps set realistic deposit amounts.

Codes that may appear with N506

  • CO-101 (Predetermination: anticipated payment upon completion of services or claim adjudication.): Predetermination: anticipated payment upon completion of services or claim adjudication.
  • PR-1 / PR-2 / PR-3 (Deductible, coinsurance, and co-payment.): Estimated cost-sharing amounts the patient may owe.
  • N505 (Alert: This response includes only services that could be estimated in real-time.): Only some services could be estimated in real time.
  • N353 (Alert: Benefits have been estimated, when the actual services have been rendered, additional payment will be considered based on the submitted claim.): Benefits were estimated; additional payment will be considered when actual services are submitted.
  • CO-197 (Precertification/authorization/notification/pre-treatment absent.): Authorization absent, a reminder that an estimate does not replace a required authorization.

N506 FAQ

Can an estimate replace a prior authorization?

No. N506 says plainly that the estimate is not a pre-authorization. If the service requires authorization, obtain it separately.

Why might the final amount differ?

Other claims may process first and change the deductible, eligibility may change, or the final claim may differ from what was estimated.

Should I refund patients if the final amount is lower?

If you collected more than the patient owes after final adjudication, follow your refund policy and any applicable rules.