RARC N585: Benefits Ended Due to Final Injury Settlement
Benefits for this claim have been terminated because a final injury settlement was reached — verify the settlement terms and redirect billing to the patient's primary health insurance if applicable.
What Does RARC N585 Mean?
RARC N585 indicates that the payer has closed out benefits related to the underlying injury because a final settlement has been executed. This is most commonly encountered in workers' compensation and liability insurance cases where a lump-sum settlement or structured settlement agreement resolves all future medical benefits for the injury in question.
Once a settlement is finalized, the responsible payer considers its obligation for that injury to be fully discharged. Any services rendered after the settlement date — or in some cases, services billed after the settlement even if rendered before — may be denied under this code. The scope of what the settlement covers depends on the specific terms: some settlements close out medical benefits entirely, while others may preserve certain ongoing treatment rights.
For providers, this denial means the workers' compensation or liability carrier is no longer accepting claims for this injury. The financial responsibility for ongoing treatment typically shifts to the patient or their regular health insurance, depending on the settlement terms and the patient's coverage.
What to Do
Obtain a copy of the settlement agreement or contact the payer to understand what the settlement covers and the effective date. Determine whether the services in question fall within or outside the settlement's scope. If the services were rendered before the settlement date and should have been covered, file an appeal with the payer citing the service dates relative to the settlement date.
For services rendered after the settlement, redirect billing to the patient's primary health insurance. Update the patient's account to reflect that the workers' compensation or liability coverage is no longer active for this condition. Inform the patient about the change in coverage and discuss any financial responsibility they may have. Going forward, verify the status of injury-related coverage before rendering services to avoid accumulating unbillable charges.
Common Scenarios
- A workers' compensation claim is denied for physical therapy sessions that took place after the claimant accepted a final settlement closing out all medical benefits
- A provider continues to bill the liability carrier for treatment of accident injuries without knowing that the patient reached a settlement months earlier
- Services rendered before the settlement date are denied because they were not billed until after the settlement was finalized
- A patient's workers' compensation case is settled, but the provider is not notified and continues scheduling and billing covered treatments
Commonly Paired With
No common pairings documented yet.