CARC 307 Active

PR-307: Medicare Maximum Fair Price Standard Default Refund Amount

TL;DR

Medicare adjusted the payment based on the Maximum Fair Price (MFP) for a drug under the Inflation Reduction Act. Verify the MFP amount against CMS published pricing and appeal if the calculation is incorrect.

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-307 Mean?

CARC 307 is a Medicare-specific adjustment code related to the Maximum Fair Price (MFP) provisions established by the Inflation Reduction Act (IRA). Under this program, Medicare negotiates maximum prices for certain high-cost drugs. When a provider bills for one of these drugs at an amount exceeding the negotiated MFP, Medicare adjusts the payment to reflect the MFP standard.

This code will typically appear as a payment reduction rather than a full denial. The adjustment represents the difference between the billed amount and the Maximum Fair Price for the applicable drug. CMS publishes the MFP amounts for covered drugs, and providers should reference these published prices to verify the accuracy of the adjustment.

Because this is a regulatory pricing mechanism rather than a coverage determination, the adjustment is generally accepted. However, if the MFP amount applied appears incorrect — for example, the wrong drug was matched or the pricing was not current — an appeal is warranted.

How to Resolve

Verify the MFP adjustment against CMS published pricing and appeal if the calculation is incorrect.

  1. Review the remark codes Examine the accompanying RARC codes for specific details about the MFP adjustment calculation.
  2. Verify the drug and dosage Confirm the drug billed matches the drug the MFP was applied to and that the dosage is correct.
  3. Check CMS published MFP amount Compare the adjustment against the current Maximum Fair Price published by CMS for the specific drug.
  4. Confirm the adjustment calculation Verify the math: the adjustment should equal the difference between the billed amount and the MFP-based payment.
  5. Contact the MAC for discrepancies If the adjustment amount does not match the expected MFP-based payment, contact the Medicare Administrative Contractor for clarification.
  6. Adjust accounts receivable Update your accounts receivable to reflect the MFP-based payment amount.
Do Not Appeal This Code

Medicare Maximum Fair Price Standard Default Refund Amount 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.

Also Filed As

The same CARC 307 may appear with different Group Codes:

CO-307 OA-307

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://x12.org/codes/claim-adjustment-reason-codes
  2. https://www.cms.gov/medicare/payment/prospective-payment-systems
  3. Codes maintained by X12. Visit x12.org for official definitions.