How To Fix Remark Code M405 (RARC) | Common Reasons, Next Steps & How To Avoid It

Remark Code N194 means that the technical component of a service will not be paid if the provider does not own the equipment used. This code is used to indicate the reason for denial or adjustment of a claim related to the ownership of equipment used in providing healthcare services.

1. Description

Remark Code N194 indicates that the technical component of a service will not be paid if the provider does not own the equipment used. The official description states: ‘Technical component not paid if provider does not own the equipment used.’ This remark code emphasizes the importance of equipment ownership in the reimbursement process and highlights the need for providers to have the necessary resources to deliver quality care.

2. Common Reasons

1. Provider does not own the equipment: This can occur when a provider leases or borrows equipment from another entity, rather than owning it outright.
2. Equipment ownership not properly documented: Lack of documentation proving equipment ownership can lead to claim denials or adjustments.
3. Equipment used is not eligible for reimbursement: Certain types of equipment may not be eligible for reimbursement, such as outdated or non-standard devices.
4. Equipment used is not medically necessary: If the equipment used is deemed unnecessary for the specific service provided, reimbursement may be denied.

3. Next Steps

1. Verify equipment ownership: Providers should ensure they have proper documentation to prove ownership of the equipment used in delivering healthcare services.
2. Review reimbursement policies: Familiarize yourself with the reimbursement policies of insurance companies and government payers to understand the requirements for equipment ownership.
3. Consider equipment leasing or purchasing: If equipment ownership is a challenge, providers may explore options for leasing or purchasing the necessary equipment.

4. How To Avoid It

1. Ensure equipment ownership: Providers should prioritize owning the equipment used in delivering healthcare services to avoid potential reimbursement issues.
2. Maintain proper documentation: Keep accurate records of equipment ownership, including purchase or lease agreements, to support reimbursement claims.
3. Stay updated on reimbursement policies: Regularly review and stay informed about the reimbursement policies of insurance companies and government payers to ensure compliance.
4. Conduct medical necessity assessments: Evaluate the medical necessity of using specific equipment for each service provided to avoid using non-reimbursable or unnecessary devices.

5. Example Cases

1. Case 1: A claim for a radiology service is denied because the provider borrowed the imaging equipment from another facility, highlighting the importance of equipment ownership.
2. Case 2: A claim adjustment occurs because the provider used outdated equipment that is not eligible for reimbursement, underscoring the need for up-to-date and reimbursable devices.

Source: Remittance Advice Remark Codes