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N795 Remark Code: Resubmit Item as a Purchase

N795 means the payer won't process the item the way it was billed, usually as a rental, and the supplier must resubmit it as a purchase. It is common on durable medical equipment claims where the payer's payment category for the item is purchase only.

Quick facts

Code
N795 (RARC N795)
Status
Active In use since November 1, 2017.
Code set
Remittance Advice Remark Codes (RARC)
Group codes
  • CO (Contractual Obligation): The line was denied because of how it was billed. The supplier is expected to rebill, not collect the amount from the patient.
Official description
Item must be resubmitted as a purchase.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What N795 means

Durable medical equipment can be paid as a rental, a purchase, or a capped rental that converts to ownership, depending on the item and the payer’s payment category for it. N795 appears when the claim billed an item one way (almost always as a rental) and the payer only pays for it as a purchase.

The fix is written into the remark itself: resubmit the item as a purchase. It is usually paired with CARC 108 (rent/purchase guidelines not met) or CARC 4 (modifier inconsistent with the procedure).

Common causes

  • Rental modifier on a purchase-only item. The line carried RR (rental) when the payer classifies the item as inexpensive or routinely purchased.
  • Default billing profile. The practice management system bills every item in a category as a monthly rental.
  • Payer-specific classification. A commercial or Medicaid plan treats an item as purchase-only even though another payer rents it.
  • Missing new/used indicator. The purchase was billed without NU (new equipment) or UE (used equipment), and the payer read the line as something else.

How to fix it

  1. Confirm the payer’s payment category for the HCPCS Level II code in its DME fee schedule or policy.
  2. Rebuild the line as a purchase: the correct HCPCS code, a purchase modifier such as NU or UE, one unit, and the purchase charge in box 24F.
  3. Check documentation. Make sure the order, proof of delivery, and any medical-necessity documentation support a purchase.
  4. Submit as the payer directs, either a new claim or a replacement with resubmission code 7 in box 22 and the original claim number.
  5. Stop recurring rental billing for the item so later months don’t generate more denials.

How to prevent it

  • Map each DME code to each payer’s rent-or-buy category in your billing system.
  • Review modifiers on the first claim for any new item you begin supplying.
  • Run DME claims through Claims Validator to flag rental modifiers on items a payer only buys.

Codes that may appear with N795

  • CO-108 (Rent/purchase guidelines were not met.): Rent/purchase guidelines were not met; N795 tells you the fix is to bill a purchase.
  • CO-4 (The procedure code is inconsistent with the modifier used.): The procedure code is inconsistent with the modifier used, such as a rental modifier on a purchase-only item.
  • CO-16 (Claim/service lacks information or has submission/billing error(s).): A billing error prevented adjudication.
  • M7 (No rental payments after the item is purchased, returned or after the total of issued rental payments equals the purchase price.): Rental payments stop after the item is purchased or once rentals reach the purchase price.
  • M10 (Equipment purchases are limited to the first or the tenth month of medical necessity.): Limits on when in the rental period an equipment purchase can be paid.
  • N370 (Billing exceeds the rental months covered/approved by the payer.): Billing exceeded the number of rental months the payer covers.

N795 FAQ

Do I need a new order to rebill as a purchase?

Not always, but the order and any required documentation must support the item as billed. Check the payer's DME policy before resubmitting.

Should I use a corrected claim or a new claim?

It depends on the payer. Many want a new claim line billed with purchase modifiers because the original line was denied; others accept a replacement claim. Ask if the remittance doesn't say.

Can the patient be charged the rental amount instead?

Not under a CO denial. The payer is telling you to rebill correctly, not shifting the cost to the patient.