N671Remark Code (RARC)Active
N671 Remark Code: Payment Based on Cost-Charge Ratio
The N671 remark code indicates that the payment made was determined based on a jurisdiction cost-charge ratio. This means the amount billed was adjusted according to the specific cost-charge ratio applicable to the jurisdiction in which the service was provided.
How It Relates to the Denial
The N671 remark code typically accompanies a Claim Adjustment Reason Code (CARC) that reflects a payment reduction due to jurisdictional factors. When seen together, they clarify that the adjustment is related to how costs are calculated in that jurisdiction.
Common Scenarios
1A hospital submitted a claim for inpatient services, and the payer returned a remittance with a CARC indicating a payment adjustment due to the jurisdiction's cost-charge ratio.
→ The N671 remark code clarifies that the adjustment is based on the local cost-charge ratio, providing insight into how the payment was determined.
2A provider billed for outpatient surgery, and the remittance reflects a reduced payment amount with a CARC citing jurisdictional adjustments.
→ The presence of the N671 remark code indicates the reduction aligns with the jurisdiction's cost-charge ratio, explaining the lower payment.
3A claim for physical therapy services was submitted, and the remittance response included a CARC for payment adjustment along with the N671 remark code.
→ This combination shows that the payment was modified based on the jurisdiction cost-charge ratio, indicating compliance with local pricing policies.
What to Do
- Review the claim details to ensure the billed amount aligns with the jurisdiction's pricing rules.
- Confirm that the services provided are appropriately priced according to the jurisdiction's cost-charge ratio.
- If necessary, adjust future claims to reflect the jurisdiction's cost standards.
What to Check
- The jurisdiction's cost-charge ratio documentation to understand the basis for the adjustment.
- The specific Claim Adjustment Reason Code accompanying the N671 remark.
- Prior remittances for similar services to identify any consistent patterns in adjustments based on jurisdiction.