PR 2 denial code

What PR-2 means

PR-2 is not a denial. It reports coinsurance, the percentage share of the allowed amount that the patient’s plan assigns to the patient. Group code PR means the amount is collectible from the patient (or from a secondary payer, if there is one).

The arithmetic runs off the allowed amount, never the billed charge. Standard Medicare Part B example: billed $150, allowed $100, deductible already met. Medicare pays 80% ($80), the remittance shows PR-2 for $20, and the $50 difference between billed and allowed posts as a contractual adjustment under CO-45. The patient owes $20. Billing the patient any share of the written-off $50 is balance billing and violates participation agreements.

Note that sequestration (CO-253) reduces Medicare’s $80 share slightly but does not change the patient’s $20.

Common causes

PR-2 appears on most paid claims for percentage-based plans. Points where new billers slip:

1. Mixed remittance lines: a claim can carry PR-1 deductible on part of the allowed amount and PR-2 coinsurance on the remainder. Post each to the patient in the amounts shown.
2. Secondary coverage: Medigap plans exist largely to pay Medicare coinsurance. Billing the patient before the secondary adjudicates creates refunds later.
3. Plan-specific percentages: commercial plans vary (10%, 20%, 30%, tiered by network status). The remittance amount governs, not an assumption.
4. Errors worth catching: coinsurance calculated on the wrong allowed amount, or applied to services the plan covers at 100%. Compare against the payer’s fee schedule or your contract before billing the patient.

How to fix and resubmit

Routine handling, in order:

1. Post the payer’s payment.
2. Post the contractual adjustment to clear the billed-versus-allowed difference.
3. Post PR-2 to patient responsibility.
4. Check for secondary coverage before statementing. Medicare claims for patients with Medigap usually cross over automatically; the secondary remittance will restate Medicare’s activity under OA-23 and pay the coinsurance. For Qualified Medicare Beneficiary (QMB) patients, federal rules prohibit billing the patient for Medicare cost-sharing; bill Medicaid and write off what Medicaid does not pay.
5. If the coinsurance percentage looks wrong against the plan’s benefit design, call the payer and request reprocessing. Do not bill the patient a number you believe is wrong.
6. There is nothing to appeal about correctly calculated coinsurance. It is the benefit design working as written.

How to prevent it

Prevention here means preventing collection problems, not the coinsurance itself:

• Verify benefits before the visit via a 270/271 transaction or the payer portal, and capture the coinsurance percentage and deductible status.
• Give patients an estimate at scheduling for expensive services. Estimated allowed amount times coinsurance percentage is a five-second calculation that prevents most billing disputes.
• Capture secondary insurance at every registration, and screen Medicare patients for QMB status on the eligibility response.
• Set posting rules so PR-2 flows to the correct next responsible party automatically (secondary payer if on file, patient statement if not).