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Denial Codes

PR-1 Denial Code: Deductible Amount, Explained

What PR-1 means on an ERA, how the deductible math works, the 2026 Medicare deductibles as CMS published them, high-deductible plan timing, and how to collect the balance correctly.

Denial code PR-1 means the payer applied all or part of the allowed amount to the patient's deductible: X12 defines reason code 1 as “Deductible Amount,” and the PR group code (“Patient Responsibility”) means the patient, not the plan, owes that amount. PR-1 is not a billing error and does not need a corrected claim. It is the plan working as designed. The work is to post it correctly, check for a secondary, and collect it from the patient in a way they understand.

This page is one of our denial code guides. The write-off that usually sits on the same line is CO-45 (charge exceeds the fee schedule); a service the plan does not cover at all is PR-204.

Last updated October 23, 2026. Reviewed by Jacob Greenberg, ClaimCarePro.

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PR-1 at a glance

Official text from the X12 code lists, read October 23, 2026.

PR-1 denial code summary
ItemWhat it says
CARC 1 (official X12 text)“Deductible Amount.” Start date 01/01/1995.
Group code PR“Patient Responsibility.” The patient owes the amount.
Usual RARCsOften none. N548 when the deductible has now been met; N781 for a QMB patient.
Is it a billing error?No. The claim processed normally.
Bill the patient?Yes, the PR-1 amount, after checking for a secondary and QMB status.
Corrected claim or appeal?Neither, unless the payer applied the wrong plan or wrong deductible.
2026 Medicare Part B deductible$283 (CMS, released November 14, 2025).

What the PR group code means for PR-1

The PR group code means the payer assigns the amount to the patient. On an 835 each adjustment carries a group code and a reason code. CO (Contractual Obligation) is the provider's write-off, PR (Patient Responsibility) is billable to the patient, OA is an other adjustment, and PI is a payer-initiated reduction. For a deductible the group is almost always PR.

Before a statement goes out, three checks still apply:

  • A secondary or supplemental plan may pay some or all of a primary's deductible. Bill it with the primary's remittance first.
  • Qualified Medicare Beneficiaries. CMS says “Federal law prohibits Medicare providers and suppliers, including pharmacies, from billing individuals in the QMB group” for Medicare cost sharing. Medicare's remark N781 flags these patients.
  • The No Surprises Act. CMS says the Act protects patients from unexpected out-of-network bills for emergency care, certain non-emergency care at in-network facilities, and air ambulance services (CMS No Surprises page). If the deductible comes from one of those claims, check that the patient share was figured under those rules.

Remark codes you may see with PR-1

  • N548: “Alert: Patient's calendar year deductible has been met.” Useful for the next visit's estimate.
  • N781: “Alert: Patient is a Medicaid/ Qualified Medicare Beneficiary. Review your records for any wrongfully collected deductible. This amount may be billed to a subsequent payer.”
  • N364: “Alert: According to our agreement, you must waive the deductible and/or coinsurance amounts.” Your contract overrides the PR here.
  • N408: “This payer does not cover deductibles assessed by a previous payer.” Seen on secondary remittances; read your financial policy before billing it.

Text from the X12 RARC list, read October 23, 2026.

Deductible math: how PR-1 is calculated

An illustrative example with round numbers, not a real claim.

The deductible applies to the allowed amount, never to your full charge. Every line balances: billed = paid + contractual adjustment (CO) + patient responsibility (PR). Take an in-network visit where the practice charges $200, the plan allows $150, the patient has $100 of deductible left, and the plan has 20% coinsurance after the deductible.

Illustrative PR-1 calculation
Line on the remittanceAmountHow it is figured
Billed$200.00The practice’s charge
CO-45 (contractual)$50.00$200 charge − $150 allowed; written off
PR-1 (deductible)$100.00Remaining deductible, applied to the allowed amount first
PR-2 (coinsurance)$10.0020% of the $50 left after the deductible
Paid by the plan$40.00$150 allowed − $100 − $10
Check$200.00$40 paid + $50 CO + $110 PR = billed

The patient owes $110 ($100 deductible + $10 coinsurance), not $160. If the allowed amount is less than the remaining deductible, the plan pays nothing, the whole allowed amount is PR-1, and the line can look like a zero-pay denial. It is not. When a copay was collected at check-in, subtract it before the statement, and if the payer reports the copay as PR-3 on the same line, make sure it is not counted twice.

Medicare deductibles for 2026, as CMS published them

2026 Medicare deductibles
Item2026 amountSource
Part B annual deductible$283 (up $26 from $257 in 2025)CMS fact sheet, November 14, 2025
Part B coinsurance after the deductible20% of the Medicare-approved amountCMS fact sheet, November 14, 2025
Part A inpatient hospital deductible$1,736 (up $60 from $1,676)CMS fact sheet, November 14, 2025

Source: 2026 Medicare Parts A & B Premiums and Deductibles, read October 23, 2026. For office claims under Part B, expect PR-1 on early-year visits until the patient's $283 is met. Medicare Advantage plans set their own deductibles; read the plan's eligibility response rather than assuming the Part B figure.

High-deductible plans and PR-1 timing

On a high-deductible health plan (HDHP), PR-1 can cover every claim for months. For 2026, IRS Publication 969 sets an HDHP's minimum annual deductible at $1,700 for self-only coverage and $3,400 for family coverage, with out-of-pocket maximums of $8,500 and $17,000. A plan can set its deductible higher than the minimum.

  • Plan year matters. Deductibles reset when the plan year starts, which is not always January for employer plans. Read it on the eligibility response.
  • The order claims process matters. When a patient sees several providers, the deductible goes to whichever claim the plan processes first, not whichever visit came first. Your estimate can be right on the visit date and wrong by the time your claim processes.
  • Family deductibles can be met by other family members' claims, so a patient's remaining amount can change without any visit to you.
  • HSA cards are common with HDHPs; accept them so patients can pay from the account built for this.

How to work and collect a PR-1 balance

  1. Post the remittance exactly. PR-1 to the patient balance, CO-45 to contractual write-off, payment to the charge. Do not write off a PR-1 amount as contractual.
  2. Check the patient's coverage stack. Secondary, supplemental or Medicaid? Bill the next payer with the primary's 835 before billing the patient; for QMB patients the patient is not billed.
  3. Confirm the deductible looks right. If the payer applied a deductible the patient had already met (for example the eligibility response showed it met), call the payer with the date and reference, and ask for reprocessing.
  4. Send a clear statement. In the practice's name, itemized, showing the plan's payment and that the balance is the deductible. Patients pay balances they understand.
  5. Offer a payment plan with written terms where your policy allows, especially for HDHP patients early in the year.
  6. Refund overpayments promptly when an estimate collected at check-in turns out higher than the PR amount.

Our patient collection service runs this cycle for practices: statements only after insurance is finished, a fixed 30-day cycle, payment plans and patient calls answered in your name.

How to prevent PR-1 surprises

You cannot prevent a deductible, but you can prevent the surprise and the unpaid balance that follows it.

  • Check the remaining deductible on a same-day eligibility response, not just whether coverage is active.
  • Tell the patient before the visit what they are likely to owe, in dollars.
  • Collect a reasonable estimate where your policy and contracts allow, and true it up after the remittance.
  • Flag QMB status at registration so no deductible is collected from a protected patient.
  • Watch the calendar: January and each plan's renewal month are when PR-1 lines rise.

Want to see how much patient balance is sitting uncollected? Our free A/R audit reviews 90 days of claims, aging and denials before any contract is signed.

PR-1 questions, answered

What does denial code PR-1 mean?
PR-1 means the payer applied the allowed amount, or part of it, to the patient’s deductible. X12 defines reason code 1 as “Deductible Amount,” and the PR group code (“Patient Responsibility”) means the patient owes it. The claim was processed correctly; the plan simply does not start paying until the deductible is met.
Is PR-1 a denial?
Not in the usual sense. The claim was accepted, priced and processed. PR-1 shows on the remittance like a denial because the payer paid less, sometimes zero, but nothing needs correcting. The amount moves from the insurance balance to the patient balance.
How much can I bill the patient for PR-1?
The PR-1 amount on the remittance, not your full charge. The deductible is applied to the allowed amount, and the difference between your charge and the allowed amount is usually a CO-45 contractual write-off for an in-network provider. If a secondary plan exists, bill it first.
What is the 2026 Medicare Part B deductible?
CMS set the 2026 Part B deductible at $283, in its fact sheet released November 14, 2025. The Part A inpatient hospital deductible for 2026 is $1,736. After the Part B deductible is met, Part B coinsurance is generally 20% of the Medicare-approved amount.
Why is PR-1 so common in January?
Deductibles reset at the start of each plan year, so early-year claims go to the deductible until the patient meets it. Medicare Part B and many commercial plans run on the calendar year, but some employer plans start their year in another month. Check the plan year on the eligibility response.
Can I collect the deductible at the time of service?
You can collect an estimate if your financial policy and payer contracts allow it, based on the remaining deductible shown on a same-day eligibility check. Collect only what the patient is likely to owe on the allowed amount, then true up after the remittance arrives and refund any overpayment promptly.
Can I bill a Medicare patient who also has Medicaid for PR-1?
Not if they are a Qualified Medicare Beneficiary. CMS says federal law prohibits Medicare providers from billing individuals in the QMB group for Medicare cost sharing, which includes the deductible. Medicare’s remark code N781 alerts you that the patient is a Medicaid/QMB beneficiary and to review your records for any wrongfully collected deductible.
What is the difference between PR-1, PR-2 and PR-3?
All three are patient responsibility. X12 reason 1 is the deductible, reason 2 is coinsurance (a percentage share after the deductible) and reason 3 is the copayment (a flat amount per visit). One claim line can carry more than one, for example part of the allowed amount to the deductible and part to coinsurance.

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Last updated October 23, 2026. Reviewed by Jacob Greenberg, ClaimCarePro.

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