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N645 Remark Code: Mark-Up Allowance Applied

N645 means the payer included a mark-up allowance in its pricing, typically for supplies, implants, or equipment reimbursed at cost plus a percentage. It explains part of the payment calculation rather than a denial.

Quick facts

Code
N645 (RARC N645)
Status
Active In use since July 15, 2013; last modified March 14, 2014.
Code set
Remittance Advice Remark Codes (RARC)
Group codes
  • CO (Contractual Obligation): Charges above the cost-plus-mark-up amount are adjusted off as a contractual or fee schedule reduction and are not billed to the patient.
  • PR (Patient Responsibility): Any patient cost-sharing on the allowed amount appears separately under PR.
Official description
Mark-up allowance.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What N645 means

Some items have no fixed fee schedule amount. Implants, custom devices, specialty supplies, and certain drugs are often paid on a cost-plus basis: the payer starts from what the provider actually paid, as shown on the invoice, and adds a mark-up to cover handling, storage, and overhead. N645 signals that such an allowance was part of the payment.

You will see this remark on commercial contracts that pay certain items at cost plus a percentage, and frequently on workers’ compensation and other state fee schedules, where the mark-up percentage is written into regulation.

What to verify

  • The cost basis. Payers generally expect the net invoice price, after discounts. Shipping and tax may or may not be included; the rules vary.
  • The percentage. Compare it to your contract or the jurisdiction’s schedule for that item category and date of service.
  • Any cap. Some arrangements limit the mark-up to a maximum dollar amount per item.
  • Quantity. Make sure the units paid match the units on the invoice and the claim.

What to do

  1. Recalculate cost plus mark-up using the invoice and the payer’s rules.
  2. If it matches, post the remaining difference as a contractual adjustment.
  3. If it is short, contact the payer with the invoice and your calculation, and request reprocessing or file a reconsideration.
  4. If the payer lacked the invoice, send it according to its attachment process. See M23 for missing-invoice issues.

Keeping invoices tied to each claim line in your billing system makes both submission and follow-up faster for cost-based items.

Codes that may appear with N645

  • CO-45 (Charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement.): The billed charge was higher than the cost-plus-mark-up amount the payer allows.
  • N649 (Payment based on invoice.): Payment was based on the invoice, the starting point for most mark-up calculations.
  • M23 (Missing invoice.): The invoice needed to price the item was not received.
  • N354 (Incomplete/invalid invoice.): The invoice was received but was incomplete or invalid.

N645 FAQ

How much mark-up do payers allow?

It varies by payer, contract, and state fee schedule. Some systems use a fixed percentage over invoice cost, sometimes with a cap per item. Check your agreement or the applicable schedule.

Where does the mark-up get calculated from?

Usually from the net invoice cost, after discounts and rebates, rather than the list price. If you sent a list-price quote, the payer may recalculate from actual cost.

What if the mark-up looks too low?

Recompute it from your invoice and the payer's stated percentage. If the payer used the wrong cost or percentage, request reprocessing with the invoice attached.