PR-201 means the plan won’t pay because the patient has money set aside for this care. That usually comes from an injury settlement. When a liability or no-fault case settles, part of the money may be set aside to pay future medical bills for the injury. Until those funds run out, the plan expects them to be used first. So the claim moves to the patient’s side, to be paid from the set-aside. (Primary source: X12 Claim Adjustment Reason Codes)
In brief: CARC 201 reads “Patient is responsible for amount of this claim/service through ‘set aside arrangement’ or other agreement.” It’s used only with group code PR and needs a remark code. Find the set-aside administrator, bill the set-aside (or the patient who manages it), and keep the plan’s denial on file for when the funds run out.
Part of our denial codes library. Written by Manikandan J, CPC, CRCR, who has worked injury settlement and secondary payer accounts for therapy and orthopedic practices. Published 22 October 2026. Last updated: 22 October 2026. Code wording quoted word for word from X12.
Official CARC 201 description
| Field | X12 text |
|---|---|
| Code | 201 |
| Description | “Patient is responsible for amount of this claim/service through ‘set aside arrangement’ or other agreement. (Use only with Group Code PR) At least one Remark Code must be provided (may be comprised of either the NCPDP Reject Reason Code, or Remittance Advice Remark Code that is not an ALERT.)” |
| X12 note | Not for use by Workers’ Compensation payers; use code P3 instead. |
| Start | 10/31/2006 |
| Last modified | 09/28/2014 |
Source: X12 Claim Adjustment Reason Codes, checked 22 October 2026.
What a set-aside is
A set-aside is money from a settlement that is kept apart to pay future medical costs for the injury. A liability set-aside (LSA) comes from a liability case, such as a car crash claim against another driver. A no-fault set-aside (NFSA) comes from no-fault auto insurance. A workers’ compensation set-aside (WCSA) comes from a work injury case. CMS explains these arrangements on its workers’ compensation set-aside page.
The remark code tells you which kind applies:
| RARC | X12 wording |
|---|---|
| N722 | “Patient must use Workers’ Compensation Set-Aside (WCSA) funds to pay for the medical service or item.” |
| N723 | “Patient must use Liability set-aside (LSA) funds to pay for the medical service or item.” |
| N724 | “Patient must use No-Fault set-aside (NFSA) funds to pay for the medical service or item.” |
Example scenario (fictional names), part 1
PR-201 Denial Example: What Happened
People: Erin Walsh, billing manager at Crossroads Spine & Therapy, and Dr. Neil Haddad, the physiatrist.
Claim: a follow-up visit (99213) and therapeutic exercise (97110) for low back pain after a car crash (M54.50). It went to Bluestem Senior Advantage, a fictional Medicare Advantage plan.
835: CAS*PR*201 on both lines with remark LQ*HE*N723, “Patient must use Liability set-aside (LSA) funds to pay for the medical service or item.”
Erin’s question: the patient had said the lawsuit was over. Who was supposed to pay now? Keep reading, or jump to how the PR-201 denial was resolved.
Why plans use reason code 201
- A settlement included a set-aside. For example, a car crash case settled and part of the money was set aside for future injury care.
- The service is for the settled injury. Care for unrelated conditions is still billed to the plan as usual.
- Funds haven’t run out. The plan expects the set-aside to pay until it is used up.
- Workers’ comp cases use another code. X12 says workers’ compensation payers use CARC P3, not CARC 201.
How to work a PR-201 denial
- Read the remark. N722, N723 or N724 tells you the type of set-aside.
- Ask the patient about the settlement. Get the set-aside administrator’s name, or learn whether the patient manages the funds.
- Check the diagnosis. CARC 201 applies to care for the settled injury. Bill unrelated care to the plan as usual.
- Bill the set-aside. Send an itemized bill to the administrator, or to the patient if they manage the funds.
- Keep the denial. When the set-aside is used up, the plan may pay again. You’ll need proof of when the funds ran out.
Example scenario (fictional names), part 2
How the PR-201 Denial Was Resolved
What Erin learned: the patient’s car crash case had settled with a liability set-aside. A professional administrator managed the funds.
The fix: no claim change was needed. Erin sent the administrator an itemized bill with the Bluestem 835 and the visit notes. She kept treating unrelated care, such as the patient’s diabetes follow-ups, as plan claims.
Outcome: the administrator paid both lines from the set-aside. Crossroads added a question about injury settlements to its intake form and flags accounts with a set-aside.
Names and details are illustrative; no real patient data.
Why there’s no claim form fix for CARC 201
Nothing on the CMS-1500 or UB-04 was wrong. The codes, diagnosis and provider data were correct. CARC 201 moves the amount to set-aside funds, so the work is billing the right party, not correcting a claim field.
PR-201 vs related codes
| Code | What it says | Key difference |
|---|---|---|
| PR-201 | Patient pays through a set-aside or other agreement | Settlement funds pay first |
| P3 | Workers’ comp case settled; patient pays through a WC set-aside | Workers’ comp only |
| CO-22 | Care may be covered by another payer per COB | Another payer comes first |
| OA-23 | Impact of prior payer adjudication | Normal secondary processing |
Recap
PR-201 means the plan expects a settlement set-aside to pay for this care. Read the remark code, find the set-aside administrator and bill the set-aside for injury-related care. Keep the denial, because the plan may pay again once the funds run out.
FAQ
What does PR-201 mean?
The patient is responsible for the claim through a set-aside arrangement or other agreement, such as an injury settlement.
Can I bill the patient for PR-201?
Yes, it’s patient responsibility. In practice, bill the set-aside administrator or the patient who manages the funds.
Does CARC 201 apply to workers’ compensation?
No. X12 says workers’ compensation payers should use CARC P3 instead.
What if the set-aside funds are used up?
Get proof from the administrator, then rebill the plan with that proof.
Does PR-201 apply to all of the patient’s care?
No. It applies to care for the injury covered by the settlement.
Sources
How we checked: each code quote on this page was matched word for word with the X12 CARC and RARC lists on 22 October 2026.
- X12, Claim Adjustment Reason Codes (CARC 201, P3, 22, 23). Accessed 22 Oct 2026.
- X12, Remittance Advice Remark Codes (N722, N723, N724). Accessed 22 Oct 2026.
- CMS, Workers’ compensation set-aside arrangements. Accessed 22 Oct 2026.
- CMS, Coordination of benefits and recovery overview. Accessed 22 Oct 2026.
Last updated: 22 October 2026 ยท Educational content; not legal advice.