Dealing with Denial Code 204 (Replacment for PR 96)
Problem : If you bill Medicare for denial, you know what a PR-96 is and what it means in billing a secondary carrier for payment. Medicare has “replaced” Claim Adjustment Reason Code 96 with a new code of 204.
Adjustment code 96 used to read: Non-covered charge(s)
Adjustment code 96 now reads: ‘Non-covered charge(s). Effective 4/1/2007, at least one Remark Code must be provided (may be comprised of either the Remittance Advice Remark Code or NCPDP Reject Reason Code)”
Adjustment code 204 states: This service/equipment/drug is not covered under the patient’s current benefit plan.
Cause: The change took place effective 2/28/2007 without any advance warning from Medicare and suppliers and payers did not have an opportunity to prepare for such a change and providers just started seeing this code “pop up” on remittance advices.
Impact: As usual, Medicare did not send out any advance warning so that we, the providers, could prepare our third party payers for the change. Consequently, suppliers are receiving denials from their secondary payers stating that they cannot process a code 204 rejection code. Remember that you can still receive an Adjustment group code of CO or a PR with the new 204 code as with the 96 code.
Solution: Suggestions would include sending an explanation of the new 204 code to your secondary payer on a strip of brightly colored paper attached to your EOB that will get their attention and help them to understand the new code. Also, call your payer and ask them if they can process this code before you just send your claims in and receive rejections that need submitted.