RARC M117: Service Not Payable Per Managed Care Contract
The service is not payable under the managed care contract or the patient's plan terms — review the contract, network status, and authorization requirements before deciding on next steps.
What Does RARC M117 Mean?
M117 indicates that the payer denied or adjusted the claim because the service does not qualify for payment under the terms of the managed care arrangement. This is a contract-level issue rather than a coding or data quality problem — the claim may be technically clean, but the payer's adjudication rules determined that the service is not payable given the relationship between the provider, the plan, and the patient's benefit structure.
Several situations can produce M117. The provider may be out of network for the patient's plan, meaning there is no contract in place to govern payment for the service. The service may require prior authorization that was not obtained. The patient's plan may exclude the specific service entirely, or may only cover it under certain conditions that were not met. In some cases, M117 surfaces when a service is carved out of the managed care contract — for example, behavioral health services that are administered by a separate entity, or pharmacy benefits that fall under a pharmacy benefit manager rather than the medical plan.
M117 often pairs with CARC 96 (non-covered charge), CARC 197 (precertification/authorization not obtained), or CARC 109 (claim not covered by this payer). The accompanying CARC provides additional context about why the managed care terms were not satisfied.
What to Do
Start by clarifying the specific reason the service is not payable. If the issue is network status, verify whether the provider has an active contract with the patient's specific plan product — managed care organizations often have multiple plan tiers with different network configurations. If prior authorization was required and not obtained, check whether a retroactive authorization is possible and file one if the payer allows it. If the service is carved out to another entity, redirect the claim to the appropriate payer.
When the denial stands because the service genuinely falls outside the contract terms, communicate with the patient about their financial responsibility. In some cases, a peer-to-peer review or appeal based on medical necessity can override a contract-based denial, particularly when the service was urgently needed and network alternatives were not available. Document these situations carefully, as they may also qualify for out-of-network exception processes under state or federal surprise billing protections.
Common Scenarios
- A specialist provides a consultation to a managed care patient without realizing the patient's HMO plan requires a referral from the primary care physician — the claim is denied with M117 for lack of referral authorization.
- A provider bills a commercial HMO for behavioral health services, but the plan carves out behavioral health to a separate managed behavioral health organization, and the medical plan returns M117.
- A patient with a narrow-network EPO plan sees an out-of-network provider for a non-emergency service, and the plan denies the claim under M117 because there is no contract with that provider for the patient's plan product.
Commonly Paired With
No common pairings documented yet.