What Is the PR-27 Denial Code?

CARC 27 is the reason code a payer uses to say the patient was not covered by this plan on the date the service was performed, because the plan's coverage had already ended. X12 maintains the official code text in External Code List 139 and publishes it at x12.org; code 27 has been active since 1 January 1995 and has never been deactivated (checked 17 September 2026).

The code arrives on the 835 Electronic Remittance Advice (ERA) or paper EOB with a Group Code in front of it. X12 publishes exactly four Group Codes — CO (Contractual Obligation), OA (Other Adjustment), PI (Payor Initiated Reduction) and PR (Patient Responsibility) — and publishes the labels only, not any rule about collectability. The Group Code tells you which side of the contract the payer has assigned the amount to:

• PR-27 (Patient Responsibility) — the payer has assigned the amount to the member, because from the plan's standpoint the patient was not its member on the date of service. That makes the balance a candidate for patient billing once you have ruled out other active coverage and confirmed nothing else bars collection.
• CO-27 (Contractual Obligation) — less common, but some payers issue reason code 27 under the CO Group Code, which makes it a provider write-off that cannot be balance-billed to the patient. The Group Code, not the reason code, decides which side absorbs it.

PR-27 is fundamentally an eligibility denial, not a coding denial. Nothing about the CPT codes, modifiers, or documentation caused it. The single fact that produced the denial is that the coverage term date fell on or before the date of service. That also makes it one of the more recoverable denial types, because the patient may still have active coverage under a different plan or member ID.

A RARC (Remark Code) frequently accompanies CARC 27 to add detail — commonly N30, which flags the patient as not eligible for the service — telling you the denial is specifically an eligibility/coverage problem rather than a benefit-design or coordination-of-benefits problem. Read the remark before deciding what the denial actually is.

PR-27 has a small number of recurring root causes. Identifying which one applies tells you immediately whether the claim is recoverable or genuinely patient responsibility.

1. Coverage term date before the date of service. The patient's plan ended (employer dropped the plan, the member left the job, the policy was canceled) and the term date is on or before the DOS. This is the single most common cause and is usually recoverable, because the patient typically has a replacement plan.
2. Eligibility lag / stale eligibility check. Eligibility was verified at scheduling weeks before the visit, the coverage changed in the interim, and no real-time re-check was done at check-in. The verification was accurate when it ran — it was simply out of date by the date of service.
3. COBRA premium gap. The member elected COBRA but missed or was late on a premium payment, so the plan cancelled coverage. Federal COBRA rules set the grace periods and allow the plan to reinstate coverage retroactively once payment arrives within them, so a claim denied today can become payable — see the COBRA paragraph under payer-specific notes below for the exact timing.
4. Payer switch mid-year. The patient moved from one carrier to another (open enrollment, job change, ACA Marketplace special enrollment, Medicare Advantage Annual Election Period). The old plan denies PR-27; the new plan is active and simply needs to be billed.
5. Medicaid recertification lapse or MCO reassignment. Medicaid eligibility must be periodically redetermined. A missed redetermination terminates coverage; a plan reassignment moves the member from one Medicaid Managed Care Organization (MCO) to another. The fix is to identify the correct active Medicaid MCO and rebill.
6. Retroactive termination. The carrier processed the original claim, then later applied a retroactive term date and recouped or denied — common with Medicare Advantage disenrollments and employer-group retro-terms.
7. Wrong member ID or wrong plan billed. Occasionally the patient is fully covered, but the claim went to the wrong plan in a family or to an expired member ID. The coverage exists; the routing was wrong.

PR-27 has one reliable three-step recovery workflow. Work it in order.

Step 1 — Re-verify eligibility for the actual date of service. This is the step most teams get wrong: they run an eligibility check today instead of for the date of service. Run a real-time 270/271 eligibility transaction (or payer-portal lookup) using the date the service was performed. Two outcomes are possible: (a) the check confirms the coverage was genuinely terminated before the DOS — confirming the denial — or (b) the check reveals the patient actually had active coverage that day (different plan, reinstated COBRA, corrected member ID), which means the claim is recoverable.

Step 2 — Locate the active payer (the recovery step). If the original plan was terminated, find what replaced it. Tools: the patient's updated insurance card, a Medicare eligibility (MBI) lookup, the state Medicaid eligibility portal to find the current MCO, a coverage-discovery / insurance-discovery tool, or a direct call to the patient. Work this step before the balance moves anywhere near a patient statement — a coverage change and a genuinely uninsured patient produce the same denial code and require opposite actions.

Step 3 — Rebill the active payer with corrected member information. Submit a fresh claim to the active payer with the correct member ID, group number, and payer ID — and watch the timely filing clock. The denial from the terminated plan does not pause the new payer's filing deadline. For Medicare fee-for-service that deadline is fixed in regulation at one calendar year after the date of service (42 CFR 424.44); for commercial payers the published manual limit is routinely superseded by your participation agreement, and some of the largest carriers publish no number at all, so check the contract rather than a generic table. If the new payer's window is close, attach proof of timely original submission to the wrong payer to support a timely-filing exception.

If eligibility re-verification confirms the patient was genuinely uninsured on the DOS and no active payer exists, the amount can move to the patient — but confirm first that the Group Code really is PR rather than CO, that no No Surprises Act protection applies, and that the patient was not a Medicaid beneficiary on that date. Then patient statements, self-pay discount eligibility, and a financial-counseling conversation are the correct path (see our patient billing and collections services).

The entire workflow is driven by front-end eligibility: the denial is produced by a fact that was knowable at check-in. We have not found a free primary source that quantifies how much of this denial type a real-time check-in process removes, so we do not publish a percentage — but the causes listed above are all detectable before the claim is created, which is why insurance eligibility verification is the prevention investment for this denial type.

Three look-alike codes get confused with PR-27. The distinction is operationally important because the fix is different for each. The wording below is ours; X12 publishes the official descriptions at x12.org.

PR-26 is the mirror image of PR-27. PR-26 means the date of service fell before the coverage start date (too early); PR-27 means the date of service fell after the coverage end date (too late). Both are eligibility-timing denials; both are fixed by identifying the plan that was actually in force on the date of service.

CO-27 vs PR-27 is an allocation question. The reason code (27) is identical; only the Group Code differs. Under PR the payer has assigned the amount to the member. Under CO it has not, and balance-billing a CO amount is a payer-contract violation. Always read the Group Code before sending a patient statement.

A fourth code worth knowing is CARC 31, which a payer returns when it cannot match the person on the claim to anyone enrolled with it. It looks similar but is a member-matching problem (wrong name/ID/DOB), not a coverage-timing problem. The fix for 31 is correcting the demographic match, not finding a new payer.

CARC 27 rarely arrives alone. The accompanying RARC (Remittance Advice Remark Code) tells you the specific eligibility nuance and shapes the correct next action. The summaries below are ours; the official remark text is published with the code list at x12.org (checked 17 September 2026).

If the remark code points at a member-ID or COB problem (N382, MA04) rather than a clean termination (N30), do not jump straight to 'patient responsibility' — the patient is likely still covered, and the denial is a routing or coordination problem. For the full library of remark codes, see our CARC denial codes list, and for the formal definition see the CARC 27 glossary entry.

How you work a PR-27 denial differs by payer type because the coverage-change patterns differ.

Medicare (traditional Part B). True PR-27 is uncommon on traditional Medicare because eligibility is generally stable, but it appears when a beneficiary switched into a Medicare Advantage (MA) plan. The most frequent scenario is a beneficiary who enrolled in an MA plan effective January 1: traditional Medicare denies because the beneficiary is now MA-only. The fix is to identify the MA plan via the Medicare eligibility (MBI) lookup and rebill the MA carrier. Retroactive MA disenrollments also produce PR-27 — verify the MBI eligibility record for the DOS.

Retroactive coverage changes on the Medicare side carry their own filing relief, which is worth knowing before a claim is written off as out of time. The normal deadline is one calendar year after the date of service (42 CFR 424.44(a), checked 17 September 2026), but the same section grants an extension where the beneficiary was not entitled to Medicare when the service was furnished and was later notified of entitlement effective retroactively to or before that date, and where a beneficiary was enrolled in a Medicare Advantage plan or a PACE organization at the time of service, was later disenrolled retroactively to or before that date, and the plan recovered its payment six months or more after the service. In those cases the filing window runs through the last day of the sixth calendar month following the month of the notification or the recovery. Document the retroactive action and the recovery date; they are what the exception turns on.

Commercial / employer plans. This is where PR-27 volume concentrates. Year-end employer plan changes, mid-year job changes, and COBRA premium lapses are the dominant causes. Commercial carriers post term dates on their provider portals; re-verify the DOS there.

COBRA timing is set by regulation, not by carrier preference — and it decides whether a denied claim becomes payable. For group health plans subject to federal COBRA, the payment rules sit at 26 CFR 54.4980B-8, Q&A-5 (checked 17 September 2026). Timely payment for a period of coverage means payment made to the plan by the date that is 30 days after the first day of that period, and plan terms may allow longer. A plan cannot require payment for any period of COBRA coverage earlier than 45 days after the date the election is made, so a newly elected beneficiary can legitimately show as unpaid for weeks. The regulation expressly describes a plan that cancels coverage when payment has not arrived by the first day of a period and then reinstates it retroactively to the first date of that period once timely payment is made. It also requires that where a provider contacts the plan to confirm coverage for a period the plan has not yet been paid for, the plan give a complete response about those rights — including telling you that the beneficiary currently has no coverage but will have it retroactively if timely payment is made. So on a COBRA-flagged PR-27, ask the plan whether the member is inside a grace period and hold the balance until that period closes, rather than moving it to self-pay on a fixed internal timer. Two limits: federal COBRA does not reach small employers, whose state continuation programs set their own election and payment windows, and the paragraphs above are the Internal Revenue Code rules, with parallel ERISA and Public Health Service Act provisions governing other plans.

Medicaid and Medicaid MCOs. Medicaid eligibility is redetermined periodically, and a missed redetermination terminates coverage and triggers PR-27. Equally common is MCO reassignment, where the member is still Medicaid-eligible but has been moved from one managed-care plan to another. Always check the state Medicaid eligibility portal for the DOS to identify the active MCO before writing anything off — a 'terminated' Medicaid patient is often enrolled in a different MCO.

The Medicaid balance-billing question is federal, not a state-by-state guess. Under 42 CFR 447.15 a state plan must limit participation to providers who accept, as payment in full, the amounts paid by the Medicaid agency plus any deductible, coinsurance or copayment the plan requires the individual to pay (checked 17 September 2026). So if the eligibility check for the date of service shows the patient was in fact enrolled — including where eligibility is later restored retroactively — the claim goes to Medicaid and the patient cannot be billed the difference. If the patient genuinely had no Medicaid coverage that day, that rule is not what governs; your state's own rules and your provider agreement are, and they should be checked before a statement goes out.

Across all payer types, the universal rule holds: re-verify for the date of service, then route the claim to whatever plan was actually in force that day.

PR-27 is more often a rebill than an appeal — if you find an active payer, you submit a new clean claim to that payer rather than appealing the denying plan. You appeal the original plan only when you have evidence the coverage was, in fact, active on the date of service (a reinstatement, a corrected term date, or a carrier error).

Use this cover letter when appealing the original plan (coverage was active on the DOS):

> Re: Appeal of Denial — CARC 27 (coverage reported as ended before the date of service) > Patient: [Name] | Member ID: [ID] | DOS: [Date] | Claim #: [Number] > > We are appealing the above claim, denied under CARC 27. Eligibility verification for the date of service confirms the patient was actively enrolled under this plan on [DOS]. Attached is the eligibility verification record (transaction date [date], reference [#]) showing active coverage effective [effective date] with no termination prior to the date of service, along with a copy of the patient's insurance card valid on the date of service. We request the denial be reversed and the claim adjudicated. Please reprocess and remit payment per the member's benefits.

Attach to the appeal: the original claim, the EOB/ERA showing CARC 27, the eligibility verification record for the date of service, a copy of the insurance card valid on the DOS, and (for COBRA reinstatements) the carrier's reinstatement confirmation.

When rebilling the active payer instead: submit a corrected claim with the new payer ID, member ID, and group number, and — if the new payer's timely-filing window is at risk — attach proof of your original timely submission to the wrong payer to support a timely-filing exception. Document the wrong-payer submission date; it is the strongest support for a filing-limit override.

PR-27 is one of the more preventable denials because it is almost entirely a front-end eligibility problem: every cause listed above is knowable before the claim is created.

1. Run real-time eligibility at every check-in, not just at scheduling. Coverage that was active at scheduling can terminate before the visit. A 270/271 eligibility transaction run at check-in catches term dates, plan changes, and COBRA lapses while the patient is still in front of you.
2. Flag high-risk patient cohorts for re-verification. Patients enrolled through ACA Marketplaces, COBRA, Medicaid, and Medicare Advantage change plans mid-year more often than employer-stable populations. Re-verify these cohorts before every visit.
3. Re-verify eligibility before resubmitting any held claim. Claims that sat in a hold queue for days or weeks should be re-checked for the DOS before they go out, not assumed accurate.
4. Build a coverage-discovery step into the denial workflow. When PR-27 hits, an insurance-discovery lookup should fire automatically to find the active replacement payer before the balance is ever moved to the patient.
5. Hold COBRA-related PR-27 balances until the applicable grace period has run. Because reinstatement is retroactive, moving the balance to the patient before the grace period closes can bill someone whose coverage is about to be restored. The grace periods are set in regulation — see the COBRA paragraph under payer-specific notes above.
6. Track PR-27 by root cause monthly. Categorize each PR-27 as term-date, eligibility-lag, COBRA, payer-switch, or genuinely-uninsured. The mix tells you whether the leak is a front-end process gap (lag, switch) or unavoidable (genuinely uninsured) — and where to fix it.

If your team lacks the bandwidth to run real-time eligibility and coverage discovery at scale, outsourced denial management services can own the re-verify, locate, and rebill loop end to end.