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N689 Remark Code: Reversal for Retroactive Rate Change

N689 is an alert that the payer reversed a previously processed claim because of a retroactive rate change. The claim is typically reprocessed at the new rate, so the net effect may be an additional payment or a recoupment.

Quick facts

Code
N689 (RARC N689)
Status
Active In use since November 1, 2013; last modified March 14, 2014.
Code set
Remittance Advice Remark Codes (RARC)
Group codes
  • CO (Contractual Obligation): The original payment and contractual adjustments are reversed, and the reprocessed claim reports a new contractual adjustment based on the updated rate.
  • PR (Patient Responsibility): If the new rate changes the allowed amount, patient cost-sharing may change too, which can mean a refund to or additional balance from the patient.
Official description
Alert: This reversal is due to a retroactive rate change.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What N689 means

Rates don’t always change on schedule. A contract amendment may be signed with an effective date months earlier, or a program may publish a rate update after claims have already been paid under the old one. When that happens, the payer goes back through affected claims, reverses each original payment, and reprocesses it at the new rate. N689 is attached to those reversals.

If the new rate is higher, the reprocessed claim brings in more money. If it’s lower, the payer may recover the difference, often by offsetting future payments.

What to do

  1. Pair each reversal with its reprocessed claim and post both, so the account shows the net change.
  2. Confirm the new rate against your contract amendment or the updated schedule, including the effective date.
  3. Recalculate patient responsibility and refund patients who overpaid; see N720 for a related alert.
  4. Question mass reversals you didn’t expect, asking the payer for the rate notice that triggered them.
  5. Track the net impact across all reprocessed claims, since retroactive rate changes often affect many accounts at once.

Codes that may appear with N689

  • CO-45 (Charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement.): The reprocessed contractual adjustment at the updated rate.
  • CO-88Deactivated (Adjustment amount represents collection against receivable created in prior overpayment.): When the new rate is lower, the difference may be collected against a later payment.
  • N692 (Alert: This reversal is due to an incorrect rate on the initial adjudication.): A reversal because the rate used originally was simply wrong, not because it changed.
  • N697 (Alert: This reversal is due to a payer's retroactive contract incentive program adjustment.): A reversal due to a retroactive contract incentive program adjustment.
  • N695 (Alert: This reversal is due to incorrect patient financial responsibility information on the initial adjudication.): A reversal to correct patient financial responsibility.

N689 FAQ

Why do rates change retroactively?

Examples include a contract amendment with an earlier effective date, a late-loaded fee schedule update, or a government program rate that was finalized after the effective date.

Will the patient's balance change?

It can, if coinsurance is based on the allowed amount. Update the patient account and issue a refund if the patient now owes less than they paid.

How do I check the new rate?

Compare the reprocessed allowed amount to the amended contract or updated fee schedule for that date of service.