Denial Codes

PR-204 Denial Code: Service Not Covered Under the Patient’s Plan

What PR-204 means on an ERA, the remark codes that come with it, when the patient can be billed, when to appeal it as a covered service, and how to stop it at the front desk.

Denial code PR-204 means the payer did not pay the line because the service is not a benefit of the patient's plan: X12 defines reason code 204 as “This service/equipment/drug is not covered under the patient's current benefit plan,” and the PR group code (“Patient Responsibility”) assigns the unpaid amount to the patient. That makes PR-204 different from most denials. Nothing is wrong with the claim's format; the plan simply does not include what was billed. The work is to confirm the decision is right and then bill the patient correctly, or prove it wrong and appeal.

This page is one of our denial code guides. If the line says PR-1 instead, the amount is the patient's deductible, covered on the PR-1 deductible page; if the payer wanted approval before the visit, see CO-197 (precertification absent).

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

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PR-204 at a glance

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

PR-204 denial code summary
Item	What it says
CARC 204 (official X12 text)	“This service/equipment/drug is not covered under the patient’s current benefit plan.” Start date 02/28/2007.
Group code PR	“Patient Responsibility.” The payer assigns the amount to the patient.
Usual RARCs	N130 (consult plan benefit documents); N425 (statutorily excluded service).
Is it a billing error?	Usually not. It is a benefit decision.
Can the patient be billed?	Usually yes, after the checks on this page.
Corrected claim?	Only if the plan, payer or code on the claim was wrong.
Appeal?	Only with evidence the service is a covered benefit.

Source: the X12 Claim Adjustment Reason Codes, Claim Adjustment Group Codes and Remittance Advice Remark Codes lists. X12 maintains the code text; payers choose which codes to send.

What the PR group code means for PR-204

The PR group code means the payer is telling you the patient, not the provider, owes the amount. Every adjustment on an 835 carries a group code and a reason code. The group code answers “who absorbs this money”: CO (Contractual Obligation) is written off by the provider, PR (Patient Responsibility) can be billed to the patient, OA (Other Adjustment) is neither, and PI is a payer-initiated reduction. The same reason code can arrive with different groups, so CO-204 and PR-204 lead to opposite actions.

PR on the remittance is permission from the payer's side, not the end of the analysis. Three things can still stop you billing the patient:

Your participation agreement. Some network contracts limit when a participating provider may bill a member for a non-covered service, for example only with the member's written agreement before the service. Read yours.
Original Medicare's ABN rules. For a service Medicare is expected to deny as not reasonable and necessary, the patient is liable only if a valid ABN was given first (details below).
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. If the PR-204 line comes from one of those situations, review it before a statement goes out. For patients who are uninsured or not using insurance, CMS says providers generally must give a good faith estimate on request or when care is scheduled at least 3 business days ahead, and a patient may be able to dispute a bill that is at least $400 more than the estimate (CMS No Surprises page).

The remark codes that usually come with PR-204

The RARC on the line tells you why the plan considers the service non-covered, so read it before deciding anything. The two you will see most:

N130: “Consult plan benefit documents/guidelines for information about restrictions for this service.” The plan's own documents (certificate of coverage, summary of benefits) are where the exclusion lives. Ask the payer which provision it applied.
N425: “Statutorily excluded service(s).” The law itself, not just the plan, excludes the service.

Original Medicare often reports non-covered services with codes other than 204. CMS's claims manual (chapter 30, §150.8) says that where a signed ABN was obtained, the denial is reported with CARC 96 (“Non-covered charge(s)”) and group code PR. So a Medicare line that reads PR-96 with remark N124 is the ABN case, not a PR-204. Our dictionary of CARC and RARC meanings is built into the denial management service we run for clients.

Top causes of a PR-204 denial

Ordered by how often the fix is something other than billing the patient.

Common causes of PR-204 and the first action for each
Cause	What happened	First action
A true plan exclusion	The plan does not cover the service at all; it appears in the plan’s list of exclusions.	Bill the patient per your financial policy and any signed agreement.
Wrong plan or policy on file	The claim went to an old plan, a terminated product, or a plan the patient no longer holds, and that plan does not include the service.	Re-verify eligibility, update the policy, and bill the correct payer.
Benefit limit or carve-out	The benefit is carved out to a vendor (for example behavioral health or therapy managed by another company) or is not part of this product.	Find the carve-out vendor on the eligibility response and bill them.
Code describes an excluded service	The CPT/HCPCS or diagnosis on the claim maps to an exclusion, but a different, accurate code describes a covered service.	Correct the coding only if the record supports it, then send a replacement claim.
Secondary or supplemental plan not billed	The primary excludes the service but a secondary plan covers it.	Bill the secondary with the primary’s 835 before billing the patient.

How to fix a PR-204 denial, step by step

Read the whole line. Group code (PR, not CO), reason code 204, every RARC, the billed and allowed amounts, and whether other lines on the same claim paid.
Verify benefits for this service. Run an eligibility check (or call the payer) for the date of service and the specific service, not just “is coverage active.” Confirm the plan and product on the claim match the patient's card. Write down the rep name, date and call reference.
Look for a carve-out or a secondary. The eligibility response often names a vendor that manages the benefit. If the patient has a secondary or supplemental plan, bill it with the primary's remittance before anyone bills the patient.
Check the coding against the record. If the record supports a different, more accurate code that is covered, send a replacement claim. Never change a code to reach coverage the documentation does not support.
Check the patient-billing conditions. Your participation agreement, any signed financial-responsibility form, and for Original Medicare patients the ABN rules below.
Bill the patient correctly. Post the PR-204 amount to the patient balance, send an itemized statement in the practice's name that names the service and says the plan did not cover it, and offer a payment plan where your policy allows. Our patient collection service runs that cycle for practices.
Or appeal as a covered service when step 2, 3 or 4 shows the plan covers it (next section).

When to appeal PR-204 as a covered service

Appeal a PR-204 only when you can show the plan covers the service. An appeal that argues the service was valuable, without pointing to coverage, rarely changes a benefit exclusion. Good grounds look like this:

The plan documents or the eligibility response list the service as a benefit, and the payer applied an exclusion from a different product.
The patient has a rider or an added benefit that includes the service.
The payer's own medical policy covers the service for the documented diagnosis, and the record shows that diagnosis.
The payer processed the claim under a plan that had already termed.

Attach the evidence: the benefit language, the eligibility response with its date and reference, and the relevant notes. File inside the payer's appeal window, which each payer sets in its provider manual. The patient can also appeal their own plan's decision, and their appeal sometimes carries more weight on a benefit question. For the wider set of causes behind denials, see why medical claims get denied.

PR-204 and Medicare: the ABN question

The Advance Beneficiary Notice of Noncoverage (ABN, Form CMS-R-131) is how a provider shifts potential financial liability to an Original Medicare patient “in situations where Medicare payment is expected to be denied,” per CMS. CMS describes it as a notice to Original Medicare (fee-for-service) beneficiaries, so it is not the tool for commercial or Medicare Advantage patients; use the plan's own process and your written financial agreement there.

Mandatory when you expect Medicare to deny a covered service as not reasonable and necessary and you want the patient to be liable (Medicare Claims Processing Manual, chapter 30, §50).
Optional for care Medicare never covers. The manual says “ABNs are not required for care that is either statutorily excluded from coverage under Medicare (i.e. care that is never covered) or most care that fails to meet a technical benefit requirement,” and that CMS strongly encourages issuing one anyway (§50.2.1).
Modifiers. The GA modifier tells the contractor a valid written notice was given; if the notice turns out to be invalid, CMS says the contractor overrides GA and the provider is liable. GZ reports that no signed ABN was obtained for an expected denial (§30, §150.8).

A signed ABN never makes Medicare pay; it decides who owes the bill when Medicare does not. Keep the signed copy: CMS contractors may request it.

How to prevent PR-204 denials

Benefit checks by service, not by patient. Before a visit that includes a service plans often exclude, verify that service's benefit and log the answer.
A short list of known exclusions. Keep the services your patients' main plans exclude, by plan, where schedulers can see it.
Written agreement before the service. When a service is known to be non-covered, tell the patient the price and get a signed agreement (or an ABN for Original Medicare) before you perform it.
Re-verify on every new card. A new plan year or a new employer plan can change which services are benefits, so re-check after any change.
Track it. Count PR-204 lines by plan and service each month. A cluster on one service is a front-desk fix, not a billing fix.

Want a second look at where denials are coming from? Our free A/R audit reviews 90 days of claims, aging and denials before any contract is signed.

PR-204 questions, answered

What does denial code PR-204 mean?

PR-204 means the payer did not pay because, in X12’s words, “This service/equipment/drug is not covered under the patient’s current benefit plan,” and the PR group code assigns the unpaid amount to the patient. It is a benefit decision, not a billing error, so a corrected claim usually changes nothing unless the plan or the coding on the claim was wrong.

Can I bill the patient for PR-204?

Usually, yes: the PR group code means the payer has assigned the amount to the patient. Before you do, confirm the denial is correct, check whether a secondary plan covers the service, check your participation agreement for any rule about billing members for non-covered services, and for Original Medicare patients make sure the denial is not one that needed an ABN.

Is PR-204 the same as CO-204?

No. The reason code is the same, but the group code decides who absorbs the money. PR assigns the amount to the patient. CO (Contractual Obligation) assigns it to the provider, who generally cannot bill the patient for it. Read the group code on the 835 line, not just the number.

Do I need an ABN to bill a Medicare patient for a PR-204 service?

An ABN applies only to Original Medicare. CMS’s manual says ABNs are not required for care that is statutorily excluded (never covered), though CMS strongly encourages giving one. An ABN is mandatory to shift liability when Medicare is expected to deny a covered service as not reasonable and necessary. Medicare often reports those denials with codes other than 204, such as CARC 96.

Which remark codes come with PR-204?

Most often N130, “Consult plan benefit documents/guidelines for information about restrictions for this service,” which points you to the plan’s own benefit documents. Medicare and some plans use N425, “Statutorily excluded service(s).” Payers vary, so read every RARC on the line.

Should I appeal a PR-204 denial?

Appeal when you have evidence the service is covered: the payer applied the wrong plan, the patient has a rider or benefit that includes it, or the claim was coded to an excluded code when a covered code describes the service. If the plan truly excludes the service, an appeal rarely helps; bill the patient under the terms they agreed to.

Does the No Surprises Act stop me billing a PR-204 balance?

The No Surprises Act protects patients from unexpected out-of-network bills for emergency care, certain non-emergency care at in-network facilities, and air ambulance services, per CMS. If the PR-204 line came from one of those situations, check the patient amount against those rules before billing. For patients who are uninsured or not using insurance, CMS says providers generally must give a good faith estimate.

How do I prevent PR-204 denials?

Verify benefits for the specific service, not just active coverage, before the visit; flag services that plans commonly exclude; get the patient’s written agreement to pay before a known non-covered service; and for Original Medicare follow the ABN rules. Most PR-204 surprises are benefit checks that stopped at “coverage is active.”

Want someone else to work PR-204 and every other denial?

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

Sources

X12 Claim Adjustment Reason Codes (code 204), read October 23, 2026
X12 Claim Adjustment Group Codes, read October 23, 2026
X12 Remittance Advice Remark Codes (N130, N425), read October 23, 2026
CMS: Advance Beneficiary Notice of Noncoverage (ABN), read October 23, 2026
Medicare Claims Processing Manual, Pub. 100-04, Chapter 30 (§30, §50, §50.2.1, §150.8), read October 23, 2026
CMS: No Surprises Act, information for consumers, read October 23, 2026