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N895 Remark Code: Specialty Drug Program Fee Schedule

N895 means the payer priced the service using a negotiated fee schedule for a specialty drug program, rather than its standard medical fee schedule. The difference between your charge and that rate is usually a contractual adjustment.

Quick facts

Code
N895 (RARC N895)
Status
Active In use since March 1, 2024.
Code set
Remittance Advice Remark Codes (RARC)
Group codes
  • CO (Contractual Obligation): The difference between your billed charge and the specialty drug program rate. Under a participating agreement, it is typically a write-off.
  • PR (Patient Responsibility): Patient cost sharing calculated on the specialty drug program rate.
Official description
Processed based on a negotiated fee schedule for a specialty drug program.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What N895 means

Payers often manage expensive drugs through separate specialty programs. The program may have its own rate sheet, often based on a drug pricing benchmark with a negotiated percentage, that differs from how other services are priced.

N895 tells you the line was priced under that program’s fee schedule. It is an explanation of the allowed amount, not a problem in itself.

Common reasons it appears

  • You billed a drug covered by the payer’s specialty drug arrangement.
  • Your practice or facility signed a separate specialty drug agreement with the payer.
  • The payer applies program pricing to certain HCPCS Level II drug codes regardless of setting.

What to do

  1. Find the program fee schedule for the date of service.
  2. Check units and NDC. Drug pricing depends on correct billing units for the HCPCS code and a valid NDC; a units error can look like a rate problem.
  3. Post the difference as a contractual adjustment when the rate is correct.
  4. Request repricing with documentation if the payment does not match the program rate.

How to prevent problems

Keep specialty program rates loaded in your system so each drug payment can be compared to the expected rate. An ERA Analyzer review of drug lines helps spot underpayments.

Codes that may appear with N895

  • CO-45 (Charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement.): The charge exceeded the fee schedule or contracted amount; N895 names the specialty drug fee schedule.
  • CO-131 (Claim specific negotiated discount.): A claim-specific negotiated discount, which some payers use for drug program pricing.
  • N773 (Drug supplied not obtained from specialty vendor.): The drug was not obtained from the required specialty vendor, a common specialty-program denial.
  • N448 (This drug/service/supply is not included in the fee schedule or contracted/legislated fee arrangement.): The drug or service is not on the fee schedule or contracted arrangement at all.
  • N381 (Alert: Consult our contractual agreement for restrictions/billing/payment information related to these charges.): Points to your contract for the payment terms.

N895 FAQ

What is a specialty drug program?

It is a payer arrangement for high-cost drugs, often infused or injected, with its own negotiated pricing and sometimes a required vendor or site of care.

Is N895 a denial?

No. It explains how the drug was priced. Check the CARC on the same line to see whether the service was paid, reduced, or denied.

What if the rate is lower than expected?

Compare it with the program's fee schedule and your agreement, including the NDC and units billed. If it does not match, ask the payer to reprice.