N602Remark Code (RARC)Active
N602 Remark Code - Adjusted Based on Redbook Allowance
The N602 remark code indicates that the adjustment made to the claim is based on the maximum allowance as defined in the Redbook. This means the billed amount exceeded the maximum allowable charge set by the payer's guidelines, leading to a reduction in payment.
How It Relates to the Denial
The N602 remark code typically accompanies claim adjustment reason codes that reflect a payment reduction due to fee schedule limitations or contractual agreements. This combination signals that the adjustment aligns with established maximum allowances for specific services or procedures.
Common Scenarios
1A provider billed for a surgical procedure at $5,000, but the remittance shows a payment of $3,000 with the accompanying reason code indicating a contractual adjustment.
→ The N602 remark code clarifies that the $3,000 payment is in line with the maximum allowance according to the Redbook, which set a limit for that procedure.
2A claim for a diagnostic test was submitted for $1,200, but the payment received was only $800, with the remittance detailing a reduction due to contractual obligations.
→ In this case, the N602 remark code explains that the $800 payment reflects the maximum allowable amount determined by the Redbook for that specific test.
3An outpatient service was billed at $2,500, but the remittance indicates a payment of $1,500, citing an adjustment reason for exceeding allowed amounts.
→ The presence of the N602 remark code indicates that the adjustment is due to the service exceeding the maximum allowance set by the payer's Redbook guidelines.
What to Do
- Review the claim's billed amount and the payment received to understand the adjustment.
- Ensure that the billed amount aligns with the payer's allowed amounts as per the Redbook.
- If further clarification is needed, consider contacting the payer for detailed fee schedule information.
What to Check
- The claim adjustment reason code that accompanies the N602 remark code.
- The payer's fee schedule or Redbook maximum allowances for the billed service.
- The remittance advice details to understand the basis of the adjustment.