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N545 Remark Code: eRx Incentive Program Reduction

N545 means payment was reduced because the provider was classified as an unsuccessful electronic prescriber under the Electronic Prescribing (eRx) Incentive Program. The reduction was a program penalty applied to the provider's payments, not a problem with the individual claim.

Quick facts

Code
N545 (RARC N545)
Status
Active In use since July 1, 2011.
Code set
Remittance Advice Remark Codes (RARC)
Group codes
  • CO (Contractual Obligation): The reduction is a program payment adjustment the provider absorbs. It is not billable to the patient.
Official description
Payment reduced based on status as an unsuccessful eprescriber per the Electronic Prescribing (eRx) Incentive Program.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What N545 means

Medicare’s Electronic Prescribing (eRx) Incentive Program first rewarded eligible professionals who prescribed electronically and reported it, then penalized those who did not. Providers who failed to meet the reporting requirements in the applicable period were labeled unsuccessful e-prescribers, and their Medicare payments were reduced by a set percentage in a later year.

N545 marks a claim where that reduction was applied. The adjustment usually appears with CARC 237 (legislated or regulatory penalty).

Why you might see it today

The program’s payment adjustments applied from 2012 through 2014, and the program was later folded into successor quality programs. You are most likely to encounter N545 when:

  • Researching old remittances during an audit or payment reconciliation.
  • Reviewing historical underpayment reports that include penalty adjustments.
  • Cleaning up legacy data in a billing system’s adjustment code mapping.

What to do

  1. Recognize it as a program penalty, not a denial or coding error.
  2. Post the reduction as a regulatory adjustment rather than a patient balance or contractual write-off, so reports stay accurate.
  3. Separate it in analytics. Quality-program penalties should not inflate denial or underpayment metrics.
  4. Do not appeal the individual claim on this basis. Program review windows have closed.

What to learn from it

Quality reporting programs still exist in different forms, and payment adjustments based on reporting status remain a feature of Medicare. Tracking current program requirements prevents similar reductions under today’s rules.

Codes that may appear with N545

  • CO-237 (Legislated/Regulatory Penalty.): Legislated or regulatory penalty, the reason code that carries the reduction.
  • CO-223 (Adjustment code for mandated federal, state or local law/regulation that is not already covered by another code and is mandated before a new code…): Some payers used this code for adjustments mandated by law or regulation.
  • N546 (Payment represents a previous reduction based on the Electronic Prescribing (eRx)): Payment representing a previous eRx reduction, for example when a reduction is returned.
  • N699 (Payment adjusted based on the Physician Quality Reporting System (PQRS)): Payment adjusted under the Physician Quality Reporting System, a related quality program.
  • N551 (Payment adjusted based on the Ambulatory Surgical Center (ASC)): Payment adjusted under the ASC Quality Reporting Program.

N545 FAQ

Is the eRx Incentive Program still active?

No. The Medicare eRx Incentive Program applied payment adjustments in 2012 through 2014. Later quality programs replaced it, so N545 is mainly relevant for older claims and history.

Could the classification be wrong?

During the program, providers could request an informal review or apply for a hardship exception within CMS deadlines. Those windows have long closed.

Does N545 mean the claim was coded incorrectly?

No. The reduction was based on the provider's prior reporting status, not on the claim itself.