PR-242: Services Not Provided by Network Provider
The patient is responsible for the out-of-network charges. Help them obtain a retroactive referral if possible, or bill per applicable balance-billing laws.
What Does PR-242 Mean?
PR-242 assigns the out-of-network charges to the patient. The patient chose or inadvertently received services from an out-of-network provider, and they are responsible for the difference. State balance-billing laws and the No Surprises Act may limit what the provider can collect.
CARC 242 is a network participation denial. The payer has determined that the services were rendered by a provider who is not part of the patient's insurance network or was not designated as the patient's primary care provider. This code replaced the older deactivated CARC 38 and is used across commercial insurance, managed care, and some government programs.
The denial can arise from several scenarios: the provider genuinely is not in-network for the patient's plan, the provider's network status recently changed, the patient did not obtain the required referral from their PCP, or the patient chose to see an out-of-network provider. The financial impact depends heavily on the group code — CO means the provider absorbs the cost, while PR means the patient is responsible.
In the current regulatory environment, the No Surprises Act provides important protections for patients who receive out-of-network emergency services or services from out-of-network providers at in-network facilities. Providers must understand these rules before deciding how to handle a CARC 242 denial, as balance-billing restrictions may apply.
Common Causes
| Cause | Frequency |
|---|---|
| Patient chose out-of-network provider The patient elected to receive services from a provider outside their network without obtaining the required referral or authorization, making them responsible for the charges or the cost difference between in-network and out-of-network rates | Most Common |
| Missing referral from primary care provider The patient's plan requires a referral from their primary care physician to see a specialist, but the referral was not obtained before services were rendered, shifting the financial responsibility to the patient | Common |
| Out-of-network pharmacy or lab used The patient filled a prescription at an out-of-network pharmacy or had lab work performed at a non-network facility, and the cost is shifted to the patient's out-of-pocket responsibility | Common |
How to Resolve
Verify your network status for the patient's specific plan, pursue retroactive authorization or single-case agreements if available, and handle patient billing according to balance-billing laws.
- Inform the patient Explain the out-of-network denial to the patient and their financial responsibility. Discuss whether a retroactive referral or authorization is possible.
- Help with retroactive referral If the patient's plan allows retroactive referrals, help them contact their PCP to obtain one. Resubmit the claim if a referral is obtained.
- Bill per applicable laws If the patient remains responsible, bill them per state balance-billing laws and No Surprises Act protections. Some situations may limit what you can collect.
Common RARC Pairings
The RARC code tells you exactly what triggered the PR-242:
| RARC | Description |
|---|---|
| N574 | Our records indicate the provider is not a network provider. |
| N657 | Services were not provided by a network or primary care provider. |
How to Prevent PR-242
- Verify patient network and referral requirements at registration and before each visit
- Educate patients about their plan's network restrictions before rendering services
- Confirm all required referrals are in place before scheduling specialist appointments
- Use real-time eligibility tools that display network status for the patient's specific plan
General Prevention
- Verify patient's network and referral requirements at registration and before each visit
- Educate patients about their plan's network restrictions and referral requirements before services are rendered
- Confirm that all required referrals are in place before scheduling specialist appointments
- Use real-time eligibility tools that show network and referral requirements for the patient's specific plan
Also Filed As
The same CARC 242 may appear with different Group Codes:
Related Denial Codes
Sources
- https://www.mdclarity.com/denial-code/242
- https://x12.org/codes/claim-adjustment-reason-codes
- Codes maintained by X12. Visit x12.org for official definitions.