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N565 Remark Code: Reporting Code Needs a Modifier

N565 is an alert that a non-payable reporting code on the claim needs a modifier. It warns that future claims containing that reporting code must include an appropriate modifier or they will not be processed.

Quick facts

Code
N565 (RARC N565)
Status
Active In use since November 1, 2012; last modified March 1, 2013.
Code set
Remittance Advice Remark Codes (RARC)
Group codes
  • CO (Contractual Obligation): Reporting codes carry no payment, so any adjustment is informational. The provider is responsible for fixing future claims.
  • OA (Other Adjustment): Some payers report the zero-dollar reporting line as an other adjustment.
Official description
Alert: This non-payable reporting code requires a modifier. Future claims containing this non-payable reporting code must include an appropriate modifier for the claim to be processed.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What N565 means

Some payers require non-payable reporting codes, which carry no charge and exist to report data such as a functional status or quality measure. Many of these must be paired with a modifier that gives the detail, for example a severity level. N565 says your reporting code arrived without the modifier. This time it is a warning. On future claims, the same omission can stop processing.

What to do

  1. Identify the reporting line on the remittance and the modifier the payer expects for it.
  2. Update your charge entry or coding rules so that code cannot be released without a modifier.
  3. Correct this claim only if the payer asks for it or payment on other lines depended on it.

Background

The code was added when Medicare required therapy functional reporting with G-codes and severity modifiers. That program has ended, but the principle still applies wherever a payer requires modifiers on reporting codes. See how to read CARC and RARC codes.

Codes that may appear with N565

  • CO-246 (This non-payable code is for required reporting only.): The non-payable code is for required reporting only; N565 adds that a modifier is missing.
  • CO-4 (The procedure code is inconsistent with the modifier used.): The procedure code is inconsistent with the modifier, or the needed modifier is missing.
  • N566 (Alert: This procedure code requires functional reporting.): Alert that a procedure code requires functional reporting on future claims.
  • N572 (This procedure is not payable unless appropriate non-payable reporting codes and associated modifiers are submitted.): Not an alert: the procedure is not payable until reporting codes and modifiers are submitted.
  • N620 (Alert: This procedure code is for quality reporting/informational purposes only.): The procedure code is for quality reporting or informational purposes only.

N565 FAQ

Where did N565 come from?

It was introduced alongside Medicare's functional limitation reporting for outpatient therapy, where non-payable G-codes had to carry severity modifiers. CMS ended that reporting requirement starting in 2019, but payers can use N565 for other reporting codes.

Was this claim denied?

The alert concerns the reporting code, which carries no payment anyway. The consequence is for future claims, which may be returned if the modifier is still missing.

Which modifier is needed?

It depends on the reporting code and payer policy. Check the payer's instructions for that code.