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N871 Remark Code: Initial Payment Set by State Law

N871 is an alert that the plan's initial out-of-network payment was calculated using a specified state law, as the No Surprises Act allows. When a state surprise-billing law governs the rate, that state's process generally applies to disputes.

Quick facts

Code
N871 (RARC N871)
Status
Active In use since March 1, 2022.
Code set
Remittance Advice Remark Codes (RARC)
Group codes
  • CO (Contractual Obligation): The difference between your charge and the state-law payment amount. Balance billing is prohibited for protected services.
  • PR (Patient Responsibility): Patient cost sharing for the protected service, which is limited to in-network-level amounts.
Official description
Alert: This initial payment was calculated based on a specified state law, in accordance with the No Surprises Act.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What N871 means

The No Surprises Act defers to states that already had their own surprise-billing payment rules. If such a law, called a specified state law, applies to the plan and the service, the plan uses it to calculate what it pays the out-of-network provider.

N871 tells you two things:

  • This is the initial payment for the claim, not a negotiated or arbitrated final amount.
  • The dollar figure came from a state formula, not the federal qualifying payment amount method.

That distinction matters because the way you challenge the amount usually follows the same source. State laws have their own dispute, arbitration, or complaint procedures, and their timelines differ.

What to do

  1. Identify the state law. Ask the plan which statute it applied if the remittance does not say.
  2. Compare the payment to the state formula. Some states set a benchmark, others rely on arbitration. Your state insurance regulator’s guidance explains how it works.
  3. Follow the state’s dispute route if you disagree, within its deadlines. Do not assume the federal open negotiation timeline applies.
  4. Limit patient billing to the PR amount. The patient is protected from balance billing either way.

Codes that may appear with N871

  • CO-45 (Charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement.): Carries the reduction from your charge to the amount the state law produced.
  • PR-1 / PR-2 / PR-3 (Deductible, coinsurance, and co-payment amounts.): The patient's share, which is often also calculated under the same state law.
  • N872 (Alert: This final payment was calculated based on a specified state law, in accordance with the No Surprises Act.): The final payment, rather than the initial one, was calculated under a specified state law.
  • N867 (Alert: Cost sharing was calculated based on a specified state law, in accordance with the No Surprises Act.): The patient's cost sharing, rather than the payment, was based on a specified state law.
  • N877 (Alert: This initial payment is provided in accordance with the No Surprises Act.): An initial payment under the federal framework, where open negotiation is available.
  • N883 (Alert: Processed according to state law): A broader alert that the claim was processed according to state law.

N871 FAQ

What is a specified state law?

It is a state law that sets how plans pay out-of-network providers for services the No Surprises Act protects. Where one applies to the plan and service, it takes the place of the federal payment method.

Can I use federal IDR to dispute an N871 payment?

Generally not when a specified state law governs the payment. Disputes typically follow the state's own process. Confirm which process applies with the plan and your state regulator.

Does this apply to self-funded employer plans?

Often not, because many state laws cannot reach self-funded ERISA plans unless the plan opts in where a state allows it. The plan's use of N871 indicates it believes the state law applies here.