CARC 294 Active

PR-294: Payment Made to Attorney

TL;DR

PR-294: 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-294 Mean?

When paired with Group Code PR, CARC 294 shifts the financial responsibility to the patient. The adjustment for payment made to attorney is deemed the patient's responsibility. The provider should verify the PR designation is correct before billing the patient.

CARC 294 indicates that the payer processed the claim but directed payment to an attorney rather than the billing provider. This code appears in cases involving legal proceedings such as personal injury claims, workers' compensation disputes, or other litigation where an attorney has obtained a legal right to receive insurance payments on behalf of the patient.

In legal cases, attorneys may file a lien or obtain a payment assignment that directs insurance proceeds to their office. This is common in auto accident cases, slip-and-fall injuries, and medical malpractice situations where the attorney is managing the settlement funds. The payer honors these legal assignments and routes payment accordingly, which means the provider does not receive direct reimbursement through the normal claims payment process.

Providers who treat patients involved in litigation need to understand that CARC 294 is not a denial of coverage but rather a redirection of payment. The service was covered and processed, but the funds went to the attorney. Recovery requires coordination with the attorney's office to obtain the provider's share of the payment from the legal settlement or judgment funds.

How to Resolve

  1. Verify patient responsibility Confirm that the PR group code assignment is correct for the CARC 294 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

Payment Made to Attorney 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-294

Also Filed As

The same CARC 294 may appear with different Group Codes:

OA-294 CO-294

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/294
  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.