RARC N898: Medicare Drug Price Negotiation Program Adjustment
Payment was adjusted under the Medicare Drug Price Negotiation Program established by the Inflation Reduction Act — verify the adjustment aligns with the published Maximum Fair Price for the applicable drug.
What Does RARC N898 Mean?
RARC N898 indicates that the payment for this claim has been adjusted in accordance with the Medicare Drug Price Negotiation Program, a provision of the Inflation Reduction Act of 2022. Under this program, CMS negotiates prices directly with manufacturers for certain high-expenditure Medicare drugs, and the resulting negotiated price — called the Maximum Fair Price (MFP) — becomes the ceiling for what Medicare pays for those drugs.
The MFP applies to drugs selected for the negotiation program and takes effect on dates specified by CMS. When a claim is submitted for a negotiated drug, the payment is adjusted to reflect the MFP rather than the standard Average Sales Price (ASP) methodology or other pricing benchmarks that would otherwise apply. This adjustment may result in a lower payment than the provider would have received under the previous pricing structure.
N898 is informational — it explains the basis for the payment amount rather than indicating a claims processing error. The program currently applies to a specific list of drugs published by CMS, and the negotiated prices are publicly available. As the program expands to include additional drugs in future years, N898 may appear with increasing frequency.
What to Do
Compare the adjusted payment amount against the published Maximum Fair Price for the specific drug billed. CMS publishes the MFP for each negotiated drug on the Medicare Drug Price Negotiation Program page at cms.gov. Verify that the drug, dosage, and administration code on your claim match the negotiated drug exactly, as the MFP applies to specific NDC and HCPCS code combinations.
If the payment does not match the published MFP, review the claim for coding errors such as incorrect HCPCS codes, dosage units, or drug identifiers. If the claim is coded correctly but the payment still appears incorrect, contact the MAC for clarification. For financial planning purposes, update your drug acquisition cost analysis to account for the MFP-based reimbursement, as this may affect the margin on drugs subject to the negotiation program.
Common Scenarios
- A Part B drug claim is paid at the Maximum Fair Price rather than the standard ASP+6% rate because the drug was selected for the Medicare negotiation program
- A provider notices a lower-than-expected payment on a high-cost injectable medication and the remittance shows N898 indicating the negotiated price applies
- A pharmacy or hospital billing department receives adjusted payments on multiple claims for a specific drug after the negotiated MFP takes effect at the start of the program year
- A provider submits a claim for a drug at the standard billing rate, and the payment is reduced to the MFP with N898 as the explanatory remark code
Commonly Paired With
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