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N551 Remark Code: ASC Quality Reporting Adjustment

N551 means payment was adjusted based on the Ambulatory Surgical Center (ASC) Quality Reporting Program. ASCs that do not meet the program's reporting requirements receive a reduced annual payment update, and this remark marks claims paid at that reduced level.

Quick facts

Code
N551 (RARC N551)
Status
Active In use since March 6, 2012.
Code set
Remittance Advice Remark Codes (RARC)
Group codes
  • CO (Contractual Obligation): The reduction is a program payment adjustment the ASC absorbs. It is not billable to the patient.
Official description
Payment adjusted based on the Ambulatory Surgical Center (ASC) Quality Reporting Program.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What N551 means

Medicare’s ASC Quality Reporting (ASCQR) Program requires ambulatory surgical centers to submit data on specified quality measures. Reporting is tied to payment: ASCs that fail to meet the requirements for a reporting period receive a reduced annual update to their payment rates in a later year.

N551 identifies claims paid under that reduced rate. It is not a coding or documentation problem with the claim; it reflects the ASC’s program status.

Why it happens

  • Required measure data was not submitted, or was submitted late.
  • Data was submitted through the wrong channel or was incomplete.
  • The ASC did not complete required administrative steps for the program.
  • Staff turnover left no one responsible for reporting.

What to do

  1. Confirm the determination in CMS’s quality reporting system or correspondence for the ASC.
  2. Consider reconsideration if you believe the ASC met the requirements, following CMS’s process and deadlines for the program year.
  3. Post the reductions as regulatory adjustments so they are not mistaken for contractual underpayments.
  4. Fix the reporting process for the current period to avoid a repeat reduction.

How to prevent it

Assign an owner for ASCQR reporting, keep a calendar of submission deadlines, and verify each submission was accepted. Because the penalty applies to a full payment year, a missed deadline has an outsized effect compared with a single claim denial.

Codes that may appear with N551

  • CO-237 (Legislated/Regulatory Penalty.): Legislated or regulatory penalty, used for program-based reductions.
  • CO-45 (Charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement.): Some payers fold the reduced rate into the fee schedule adjustment.
  • N545 (Payment reduced based on status as an unsuccessful eprescriber per the Electronic Prescribing (eRx)): A reduction under the former eRx Incentive Program, another quality-related adjustment.
  • N699 (Payment adjusted based on the Physician Quality Reporting System (PQRS)): Payment adjusted under the Physician Quality Reporting System.
  • CO-278 (Performance program proficiency requirements not met. (Use only with Group Codes CO or PI)): Performance program proficiency requirements not met.

N551 FAQ

Why does the ASC Quality Reporting Program reduce payments?

Medicare requires ASCs to report specified quality measures. ASCs that do not meet the requirements for a reporting period receive a lower annual payment update in a later payment year.

Is the reduction applied to every claim?

It applies to the ASC's Medicare payments for the affected payment year, so it typically shows up across claims rather than on a single case.

Can the ASC contest it?

CMS provides a reconsideration process with deadlines for ASCs that believe the determination was wrong. Check current program guidance.