RARC N699: Payment Adjusted Under PQRS Incentive Program
Payment was adjusted under the PQRS/MIPS quality reporting incentive or penalty program — check your reporting status and ensure quality measures are being submitted correctly.
What Does RARC N699 Mean?
RARC N699 indicates that the payment for this claim has been modified based on the Physician Quality Reporting System (PQRS) program or its successor, the Merit-based Incentive Payment System (MIPS). These Medicare programs tie a portion of physician reimbursement to quality measure reporting and performance. Providers who do not meet reporting requirements may face a negative payment adjustment, while those who report successfully may receive a bonus.
The adjustment is typically applied as a percentage reduction or increase to the Medicare allowable amount across all applicable claims. For PQRS, the penalty was up to 2% of the Medicare allowable. Under MIPS, the adjustment can range from a negative 9% to a positive bonus, depending on the provider's composite performance score across quality, cost, improvement activities, and promoting interoperability categories.
The adjustment reflected by N699 is based on reporting performance from a prior measurement period — typically two years before the payment year. This means a penalty appearing on current claims reflects reporting deficiencies from an earlier period, and correcting current reporting will affect future payment years rather than the current one.
What to Do
Log into the CMS Quality Payment Program portal (qpp.cms.gov) to review your MIPS performance feedback and determine whether the adjustment is a penalty for non-reporting, a penalty for low performance, or a bonus for strong performance. Verify that the percentage applied to your claims matches the published adjustment for your performance category.
If you believe the adjustment was applied in error — for example, if you reported quality measures but they were not recorded correctly — submit a targeted review request through the QPP portal within the designated review period. Going forward, ensure that quality measures are being captured and submitted correctly throughout the reporting period. Work with your EHR vendor or quality reporting partner to confirm that eligible measures are included on claims and that your reporting meets the minimum thresholds for volume and completeness.
Common Scenarios
- A physician receives a 2% payment reduction on all Medicare claims because they did not submit any quality measures during the prior MIPS reporting period
- A group practice's MIPS composite score falls below the performance threshold, resulting in a negative payment adjustment applied to all group members' claims
- A provider who successfully reported quality measures sees a positive adjustment on their claims reflecting a MIPS incentive bonus
- The payment adjustment appears unexpectedly because the provider was unaware that their reporting was incomplete or did not meet the minimum case volume thresholds
Commonly Paired With
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