CARC 278 Active

PR-278: Performance Program Proficiency Requirements Not Met

TL;DR

PR-278: The patient is financially responsible for this amount. Verify the determination is correct before initiating patient billing.

Action
Review & Decide
Who Pays
Patient
Appeal
No
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-278 Mean?

When paired with Group Code PR, CARC 278 shifts the financial responsibility to the patient. The adjustment for performance program proficiency requirements not met is deemed the patient's responsibility. The provider should verify the PR designation is correct before billing the patient.

CARC 278 indicates a payment adjustment because the provider failed to meet the proficiency requirements of a quality or performance program. These programs — including CMS's Merit-based Incentive Payment System (MIPS), commercial value-based payment arrangements, and other pay-for-performance contracts — set specific benchmarks that providers must achieve to receive full payment.

The adjustment can stem from genuinely failing to meet quality metrics, but it can also result from incomplete or incorrect data reporting. If the provider met the benchmarks but the data was not properly submitted or was submitted late, the payer may incorrectly apply the adjustment. The 835 Healthcare Policy Identification Segment (loop 2110 REF) typically identifies which specific program triggered the adjustment. Under CO, the adjustment is treated as a contractual obligation — the provider agreed to the performance terms and did not meet them. Under PI, the payer initiated the reduction based on their assessment of the provider's performance metrics.

How to Resolve

  1. Verify patient responsibility Confirm that the PR group code assignment is correct for the CARC 278 adjustment. Review the remittance advice and any RARC codes for context.
  2. Review for potential errors Check whether the underlying denial reason can be corrected, which may eliminate the patient's responsibility. Verify coding accuracy and documentation completeness.
  3. Appeal if designation is incorrect If the PR assignment appears incorrect or the denial is in error, file an appeal with supporting documentation before billing the patient.
  4. Generate patient statement If the determination is correct, generate a patient statement for the amount and follow standard patient collection procedures.
  5. Communicate with the patient Explain the charge to the patient, provide information about their financial responsibility, and discuss payment options.
Do Not Appeal This Code

Performance Program Proficiency Requirements Not Met grouped under PR places the financial responsibility on the patient. The specific reason depends on the context of this adjustment — review any accompanying RARC codes for detail. Because this represents a placement of responsibility rather than a coverage denial, an appeal isn't the right action; verify the placement is correct before billing the patient.

How to Prevent PR-278

Also Filed As

The same CARC 278 may appear with different Group Codes:

CO-278 PI-278 OA-278

Related Denial Codes

PR-13 — Date of Death Precedes Date of Service PR-14 — Date of Birth Follows Date of Service PR-19 — Workers' Compensation Claim PR-20 — Liability Carrier Responsible PR-21 — No-Fault Carrier Responsible

Sources

  1. https://www.mdclarity.com/denial-code/278
  2. https://resdac.org/sites/datadocumentation.resdac.org/files/Adjustment%20Reason%20Code%20Code%20Table%20(TAF%20Claims).txt
  3. https://x12.org/codes/claim-adjustment-reason-codes
  4. Codes maintained by X12. Visit x12.org for official definitions.