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PR-P3 Denial Code: WC Settled, Patient Pays via Set-Aside

PR-P3 means the workers' compensation case has settled and the patient is now responsible for this claim through a workers' comp Medicare set-aside arrangement (WCMSA) or another settlement agreement. The carrier no longer pays for future treatment covered by the settlement.

Quick facts

Code
PR-P3 (CARC P3)
Status
Active In use since November 1, 2013.
Code set
Claim Adjustment Reason Codes (CARC)
Group codes
  • PR (Patient Responsibility): The only group allowed for P3. The patient is responsible, typically paying from the set-aside funds or settlement.
Official description
Workers' Compensation case settled. Patient is responsible for amount of this claim/service through WC 'Medicare set aside arrangement' or other agreement. To be used for Workers' Compensation only. (Use only with Group Code PR)
X12 Claim Adjustment Reason Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What PR-P3 means

CARC P3 says workers’ compensation case settled. Patient is responsible for amount of this claim/service through WC “Medicare set aside arrangement” or other agreement. X12 limits it to workers’ compensation and requires the PR group code. It replaced deactivated CARC 201 for workers’ comp use.

When a workers’ comp case settles, the carrier often pays a lump sum and closes its responsibility for future medical care. If the injured worker is, or will soon be, a Medicare beneficiary, part of that settlement may be placed in a Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) to pay for future injury-related care that Medicare would otherwise cover. Other settlements may simply leave future medical costs to the patient under the agreement.

With PR-P3, the carrier is telling you: the case is closed, and payment for this service now comes from the set-aside or the patient.

Common causes

  • Settlement closed future medical benefits before the date of service.
  • Treatment continued after settlement without the practice being told.
  • Set-aside administrator not identified in the patient’s account.
  • Services billed to the carrier out of habit after the case closed.

How to handle it

  1. Confirm the settlement date and terms with the patient, their attorney, or the carrier.
  2. Identify who administers the set-aside, a professional administrator or the patient.
  3. Bill the set-aside or the patient for injury-related services under the arrangement’s rules.
  4. Bill health coverage for services unrelated to the work injury.
  5. If the set-aside is exhausted, get documentation, then bill Medicare or other coverage as appropriate.

How to prevent it

  • Ask workers’ comp patients about settlement status at each visit, particularly for long-running cases.
  • Record settlement dates and set-aside details on the patient account.
  • Communicate with the carrier or attorney when a settlement is expected.
  • Separate injury-related and unrelated services clearly in documentation.

Specialty notes

Pain management, orthopedic, and PT practices treating chronic work injuries are most likely to encounter set-aside arrangements, since their patients often need care long after a case settles.

Remark codes that may appear with PR-P3

  • N585 (Benefits are no longer available based on a final injury settlement.): Benefits are no longer available based on a final injury settlement.
  • N664 (Adjusted based on a legal settlement.): The adjustment is based on a legal settlement.
  • PR-201 (Patient is responsible for amount of this claim/service through 'set aside arrangement' or other agreement. (Use only with Group Code PR)): The general code for patient responsibility through a set-aside or other agreement, which P3 replaced for workers' comp.
  • CO-P2 (Not a work related injury/illness and thus not the liability of the workers' compensation carrier): The carrier says the injury isn't work-related.
  • CO-P4 (Workers' Compensation claim adjudicated as non-compensable.): The workers' comp claim was found non-compensable.
  • CO-215 (Based on subrogation of a third party settlement): Adjustment based on subrogation of a third-party settlement.

PR-P3 FAQ

What is a Medicare set-aside arrangement?

A portion of a workers' compensation settlement set aside to pay for future medical care related to the injury that Medicare would otherwise cover. The funds must be used for those services before Medicare pays.

How do I bill a patient with a WCMSA?

Bill the set-aside account holder or administrator, or the patient if they self-administer the account, for services related to the injury. Payment rules for the set-aside are set by the arrangement.

What happens when the set-aside funds run out?

Once the set-aside is properly exhausted and documented, Medicare may begin paying for injury-related services as the patient's coverage allows. Ask the administrator for proof of exhaustion.

Does P3 apply to care unrelated to the work injury?

No. The settlement covers care for the work injury. Unrelated care is billed to the patient's regular health coverage.