RARC N587: Insurance Policy Benefits Fully Exhausted

What Does RARC N587 Mean?

RARC N587 indicates that the patient has reached the maximum benefit limit under their insurance plan for the billed service or service category. The policy's benefit cap may apply to a specific type of service (such as physical therapy visits, mental health sessions, or prescription drug coverage), a dollar amount, or a combination of both. Once the cap is reached, no additional payment is available from the payer for the remainder of the benefit period.

Benefit exhaustion can affect individual services or broader benefit categories depending on the plan design. Some plans impose annual limits, while others have lifetime maximums for certain benefit types. The exhaustion may apply to the specific service billed or to a broader category that encompasses it — for example, a combined limit on all rehabilitation services that includes physical therapy, occupational therapy, and speech therapy.

This is not a denial based on medical necessity or coding errors. The payer acknowledges the service may be appropriate but has no remaining benefits to apply. The financial responsibility for continued treatment shifts to the patient unless alternative coverage sources are available.

What to Do

Contact the payer to confirm the benefit exhaustion and identify the specific limit that was reached. Determine whether the limit resets at a certain date (such as the plan year or calendar year) and how much of the benefit has been used. Verify that all prior claims applied to this limit were legitimate — if any were processed in error, correcting them could free up remaining benefits.

Inform the patient about the exhausted benefits and discuss options. These may include self-pay arrangements, payment plans, applying for financial assistance, or checking whether the patient has secondary coverage that could pick up the remaining costs. For future appointments, implement a workflow to verify remaining benefits before services are rendered so patients are informed of their financial responsibility in advance.

Common Scenarios

• A patient's plan allows 30 physical therapy visits per year and all visits have been used, so subsequent therapy claims are denied
• The patient's mental health benefit has a dollar cap that was reached mid-treatment, leaving remaining sessions without coverage
• A combined rehabilitation benefit limit is exhausted by physical therapy claims, causing subsequent occupational therapy claims to be denied as well
• A patient with a high-cost chronic condition reaches their annual out-of-pocket maximum for a specific drug category

Commonly Paired With

RARC N587 commonly appears alongside these CARC denial codes: