CARC 116 Active

PR-116: Advance Indemnification Notice Requirements Not Met

TL;DR

The patient accepted responsibility through the ABN. Bill the patient for the denied amount and provide a copy of the signed ABN if they question the charge.

Action

Collect from Patient

Who Pays

Patient

Appeal

Patient Impact

Direct Financial

Disclaimer

This content is for informational purposes only and does not constitute professional billing advice. Always verify information against your payer contracts and current coding guidelines. Consult a certified billing specialist for specific claim issues.

What Does PR-116 Mean?

PR-116 means the patient accepted financial responsibility through the ABN process and the provider can bill the patient for the denied amount. The patient selected Option 2 on the ABN (receive the service and accept financial responsibility) or the ABN terms otherwise transfer liability to the patient. The provider should have a signed, dated ABN on file to support patient billing.

CARC 116 fires when a payer determines that the Advance Beneficiary Notice (ABN) — or equivalent advance indemnification notice — for a service expected to be non-covered does not meet the required standards. The ABN is the mechanism that allows providers to transfer financial liability to patients for services Medicare or other payers are expected to deny. Without a properly executed ABN, the provider cannot bill the patient for the denied service.

CMS maintains specific requirements for a valid ABN (Form CMS-R-131): it must be issued before the service is provided, must describe the specific service expected to be non-covered, must include an estimated cost, must state the reason non-coverage is expected, and must allow the patient to select from three options — request payer billing, accept financial responsibility, or decline the service. The patient must sign and date the form before the service is rendered. Blanket or routine ABNs that are not customized to the specific service and situation do not meet CMS requirements.

The Group Code determines the financial outcome. CO-116 means the provider must write off the denied amount because the ABN was deficient and liability cannot be transferred to the patient. PR-116 means the patient accepted financial responsibility through a valid ABN and the provider can bill the patient. The modifier on the claim matters: GA indicates a valid mandatory ABN is on file, and GZ indicates the service is expected to be denied as not reasonable and necessary. Using the wrong modifier can trigger this denial even when the ABN itself is complete.

Common Causes

Cause	Frequency
ABN partially valid with patient election to pay The ABN was obtained and the patient elected Option 2 (patient accepts financial responsibility), but the notice had minor deficiencies that the payer still accepted for partial liability transfer	Most Common
Patient elected non-coverage option on valid ABN The patient was properly notified through a valid ABN and chose to receive the service knowing it may not be covered, accepting financial responsibility as documented in the signed ABN	Common

How to Resolve

Determine which ABN requirement was not met, verify the form on file, and either appeal with the ABN documentation or absorb the cost if no valid notice exists.

Confirm the ABN is on file Verify the signed ABN shows the patient selected Option 2 (accept financial responsibility) and all form elements are complete.
Bill the patient Send the patient a bill for the denied amount with documentation explaining the service was not covered and referencing their signed ABN acknowledgment.
Provide ABN copy if disputed If the patient disputes the charge, provide a copy of the signed ABN documenting their prior informed consent to accept financial responsibility.

Do Not Appeal This Code

PR-116 indicates the patient elected to receive the service and accepted financial responsibility through the ABN process. Bill the patient per the signed ABN terms. If the patient disputes, provide the signed ABN as proof of prior informed consent.

How to Prevent PR-116

Clearly explain all three ABN options to patients before they sign, ensuring they understand the financial implications of each choice
Provide patients with a copy of the signed ABN for their records immediately after execution
Document the patient's ABN option selection clearly in the billing system so the correct modifier and billing path are used

General Prevention

Clearly explain to patients what the ABN means and what their financial responsibility will be if they choose to receive the service
Ensure patients understand all three ABN options before making their selection
Provide patients with a copy of the signed ABN for their records

Also Filed As

The same CARC 116 may appear with different Group Codes:

CO-116

Related Denial Codes

PR-1 — Deductible Amount PR-2 — Coinsurance Amount PR-3 — Co-payment Amount PR-49 — Routine/Preventive Exam Not Covered PR-50 — Non-Covered Services / Medical Necessity Denial

Sources

https://www.mdclarity.com/denial-code-carcs
https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/ABN-Tutorial/formCMSR131tutorial111915f.html
https://www.fastpayhealth.com/blog/rules-advance-beneficiary-notice-noncoverage
Codes maintained by X12. Visit x12.org for official definitions.