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N877 Remark Code: NSA Initial Payment, Negotiation Open

N877 is an alert that this is the plan's initial payment for a service protected by the No Surprises Act. If you want a higher out-of-network rate, you may start open negotiation with the plan.

Quick facts

Code
N877 (RARC N877)
Status
Active In use since March 1, 2022.
Code set
Remittance Advice Remark Codes (RARC)
Group codes
  • CO (Contractual Obligation): Your charge above the plan's initial payment and the patient's share. Balance billing is prohibited for this amount.
  • PR (Patient Responsibility): In-network-level cost sharing owed by the patient.
Official description
Alert: This initial payment is provided in accordance with the No Surprises Act. The provider or facility may initiate open negotiation if they desire to negotiate a higher out-of-network rate.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What N877 means

For emergency services, certain non-emergency services at in-network facilities, and air ambulance, a nonparticipating provider cannot balance bill the patient. Instead, the plan pays an initial payment, and the provider can challenge it through the federal process.

N877 labels that initial payment. The amount is usually tied to the plan’s qualifying payment amount, but it is the plan’s opening position, not a settled rate.

Deciding whether to act

Ask these questions when the remark appears:

  • Is the payment near your usual contracted rates for the service in your market?
  • Is the claim amount large enough to justify the administrative work of negotiation and possible IDR fees?
  • Are there similar claims you could bundle in a later IDR filing, where the rules allow batching?

What to do

  1. Record the receipt date. The open negotiation window runs from it.
  2. Review the QPA disclosure that came with the payment.
  3. Send an open negotiation notice to the plan if you want a higher rate, using the standard federal notice.
  4. Track the 30-business-day negotiation period. If it ends without agreement, you can initiate federal IDR within the short window that follows.
  5. Bill the patient only the PR amount regardless of what you decide.

Codes that may appear with N877

  • CO-45 (Charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement.): The reduction from your billed charge to the plan's out-of-network allowance.
  • PR-2 / PR-3 (Coinsurance and co-payment amounts.): The patient's share of the recognized amount.
  • N876 (Alert: This item or service is covered under the plan.): The plan paid nothing and sent a notice of denial of payment instead.
  • N874 (Alert: This final payment was determined through open negotiation, in accordance with the No Surprises Act.): Final payment after a successful open negotiation.
  • N875 (Alert: This final payment equals the amount selected as the out-of-network rate by a Federal Independent Dispute Resolution Entity, in accordance…): Final payment selected by a federal IDR entity.
  • N871 (Alert: This initial payment was calculated based on a specified state law, in accordance with the No Surprises Act.): An initial payment calculated under a specified state law, where the state's process usually applies.

N877 FAQ

How long do I have to start open negotiation?

Under the federal rules, you have 30 business days from receiving the initial payment or notice of denial. Confirm current requirements on the CMS No Surprises Act pages.

What information comes with the initial payment?

Plans are expected to disclose the qualifying payment amount and certain related details with the initial payment, along with contact information for starting negotiation.

Do I have to negotiate?

No. If the payment is acceptable, post it and write off the CO balance.