What Is the PR-27 Denial Code?

The official X12 definition of CARC 27 is 'Expenses incurred after coverage terminated.' In plain language: the payer is saying the patient was not covered by this plan on the date the service was performed, because the plan's coverage had already ended.

The code arrives on the 835 Electronic Remittance Advice (ERA) or paper EOB with a Group Code in front of it. That Group Code is the part that determines who owes the money:

• PR-27 (Patient Responsibility) — the payer is shifting the balance to the patient because, from the plan's standpoint, the patient was uninsured by this plan on the date of service. If no other active payer is found, the balance is legitimately the patient's.
• 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 billability.

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 makes PR-27 one of the most recoverable denial types in the book — because in most cases the patient still has active coverage, just under a different plan or member ID.

A RARC (Remark Code) almost always accompanies CARC 27 to add detail — most often N30 ('Patient ineligible for this service') — telling you the denial is specifically an eligibility/coverage problem rather than a benefit-design or coordination-of-benefits problem.

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 The verification was accurate when it ran — it was simply out of date by the date of service.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 carrier retroactively terminated coverage. Once the member pays the back premium, the carrier may reinstate coverage retroactively — at which point the previously denied claim becomes payable again on resubmission.
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. In our experience this is where the bulk of PR-27 dollars are recovered — most 'terminated' patients simply changed plans.

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 original denial does not pause the new payer's filing deadline, which runs from the date of service. If the new payer is close to its filing limit, 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 balance becomes legitimate patient responsibility — at which point 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. A robust check-in eligibility process eliminates an estimated 70-80% of PR-27 denials before they ever happen, which is why insurance eligibility verification is the highest-ROI 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.

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 a billability question. The Reason Code (27) is identical; only the Group Code differs. Under PR you may bill the patient if no active coverage is found. Under CO you may not — it is a contractual write-off, 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 — 'Patient cannot be identified as our insured.' 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.

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.

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. For COBRA, a member who pays a back premium can have coverage reinstated retroactively — so a PR-27 that is uncollectable today may become payable in 30-60 days. Hold COBRA-related PR-27 balances briefly before moving them to patient responsibility, and re-run eligibility before sending a self-pay statement.

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 — many 'terminated' Medicaid patients are simply enrolled in a different MCO. Note that for genuinely terminated Medicaid patients, some states prohibit balance-billing the patient at all, so confirm your state's rules before issuing a statement.

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 (Expenses Incurred After Coverage Terminated) > Patient: [Name] | Member ID: [ID] | DOS: [Date] | Claim #: [Number] > > We are appealing the above claim, denied as CARC 27 (expenses incurred after coverage terminated). 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 most preventable denials because it is almost entirely a front-end eligibility problem. A disciplined intake process eliminates the large majority of these denials before a claim is ever 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 have the highest mid-year coverage-change rates. 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 briefly. Because COBRA reinstatement is retroactive, a short hold (and a re-check at 30-45 days) prevents prematurely billing a patient whose coverage is about to be reinstated.
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.

In our denial audits, practices that move eligibility verification to real-time check-in and add a coverage-discovery step to the denial queue typically cut PR-27 denial volume by 70-80% within 90 days and recover most of the remainder by re-routing claims to the active payer. 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.