N723Remark Code (RARC)Active
N723 Remark Code - Liability Set-Aside Funds Required
The N723 remark code indicates that the patient is required to utilize Liability Set-Aside (LSA) funds to cover the costs associated with the medical service or item. This remark supplements a Claim Adjustment Reason Code, providing clarity on the payment responsibility related to the patient's liability funds.
How It Relates to the Denial
The N723 remark code typically accompanies adjustment reason codes that denote a denial or reduction in payment due to the patient's obligation to use LSA funds. Together, they signal that the payer is not responsible for payment until the patient fulfills this requirement.
Common Scenarios
1A patient received physical therapy services after a motor vehicle accident, and the claim was submitted for reimbursement. The remittance shows an adjustment indicating payment was denied.
→ The N723 remark informs the billing office that the patient must first use their LSA funds to pay for the therapy, which the payer will not cover until that requirement is met.
2A claim for durable medical equipment was submitted for a patient involved in a liability case. The remittance returned an adjustment stating no payment was made for the equipment.
→ The presence of the N723 remark indicates that the patient must utilize LSA funds for this equipment before the payer will process any claims for reimbursement.
3A surgical procedure was billed for a patient who has an ongoing liability claim. The remittance response includes a denial for the service rendered.
→ The N723 remark suggests that the payer expects the patient to apply their LSA funds to cover the surgical costs, indicating that the payer is not responsible until this occurs.
What to Do
- Advise the patient to use their Liability Set-Aside funds to pay for the medical service or item in question.
- If the patient has questions about the LSA funds, direct them to their legal representative or claims administrator for guidance on accessing these funds.
What to Check
- Review the patient's Liability Set-Aside documentation to confirm the availability of funds.
- Check the claim adjustment reason code for details on the denial or payment reduction context.
- Verify the remittance advice for any additional notes that may clarify the use of LSA funds.