PR-186: Level of Care Change Adjustment

What Does PR-186 Mean?

PR-186 appears when the level of care change affects the patient's cost-sharing obligation. If the payer downgrades the service level, the patient's copay, coinsurance, or deductible responsibility may be recalculated based on the new lower level. This can result in either an increase or decrease in the patient's out-of-pocket amount depending on the plan structure.

CARC 186 shows up on your remittance when the payer makes a level of care adjustment — most commonly downgrading the billed service to a lower-acuity level. This is not an outright denial of the service; the payer agrees the patient received care, but disagrees with the intensity or setting that was billed. The result is a reduced payment based on the lower level of care the payer deems appropriate.

This code hits hardest in inpatient and facility settings. A common scenario is billing for inpatient admission when the payer determines that observation status would have been sufficient. It also frequently occurs with E/M levels — billing a level 5 office visit when the payer's review concludes a level 3 or 4 was warranted based on the documentation. Payers typically use clinical criteria tools like InterQual or Milliman to make these determinations, and if the medical record does not meet their thresholds, they will downgrade.

The financial impact can be significant because the gap between the billed level and the approved level often represents a substantial dollar amount. Under CO, the provider must write off this difference. Under PR, the patient's cost-sharing may change based on the adjusted service level. Appeals are common and often successful when the provider can demonstrate that the original level of care was medically necessary with strong clinical documentation.

Common Causes

How to Resolve

Review the clinical documentation against the payer's level of care criteria, and appeal with medical necessity evidence if the original level was justified.

1. Calculate adjusted patient responsibility Review the ERA to determine the patient's new cost-sharing amount based on the payer-approved level of care.
2. Update the patient account Adjust the patient's balance to reflect the revised cost-sharing. If the patient already paid based on the higher level, process a refund for the difference.
3. Notify the patient Inform the patient about the level of care change and how it affects their financial responsibility. Provide a clear statement showing the adjustment.

How to Prevent PR-186

• Inform patients upfront that the billed level of care is subject to payer review and their out-of-pocket costs may change
• Provide estimated costs based on the expected level of care but note that final costs depend on payer adjudication

General Prevention

• Inform patients upfront about potential level of care changes and how they may affect out-of-pocket costs
• Provide cost estimates based on the expected level of care before services are rendered

Also Filed As

The same CARC 186 may appear with different Group Codes:

Related Denial Codes