PR-27 Denial Code: The Complete 2026 Guide to Resolution, Prevention & Appeals

INTRODUCTION

Few things frustrate a billing team more than preventable denials. The PR-27 denial code and CO-27 denial code rank among the most common reasons claims get kicked back, and they're usually avoidable. Here's the real cost: MGMA data shows reworking a single denied claim runs $25 to $118. That's time and money you shouldn't be losing.

So what does denial code 27 actually mean? The PR-27 denial code tells you the patient's insurance wasn't active when you provided the service. Officially, it's described as "expenses incurred after coverage terminated." Translation: you delivered care after their policy ended.

This creates a double burden for your practice. You've lost revenue on services already rendered. And now your patient faces an unexpected bill, which strains the relationship and makes collecting that balance harder down the line.

This guide covers everything you need to handle PR-27 and CO-27 denials. You'll learn what these codes mean and how they differ, the most common causes, a step-by-step resolution process, prevention strategies that work, 2026 CMS policy updates you need to know, and payer-specific guidance for Medicare, BCBS, UHC, and more.

At MedSole RCM, we've helped healthcare providers cut denial rates and recover revenue that would otherwise slip through the cracks. Whether you're handling this in-house or considering outsourcing your denial management, this guide gives you the expertise to take control of these denials.

What is PR-27 Denial Code? Definition & Official Meaning

What is the PR-27 denial code? It's a Claim Adjustment Reason Code that means "expenses incurred after coverage terminated." The payer reviewed your claim, checked the patient's coverage dates, and concluded that the insurance policy wasn't active when you provided services. That's the fundamental issue behind every PR-27 denial.

The PR 27 denial code meaning seems straightforward on the surface. But whether you actually recover that revenue depends on verifying the facts and understanding your options. Some of these denials are legitimate and unavoidable; others are payer errors that are absolutely worth fighting.

Official CARC Definition

The PR-27 denial code description comes directly from the X12 organization, which maintains all standard Claim Adjustment Reason Codes for the US healthcare industry. These standardized codes create a common language between providers and payers nationwide.

Official Code Details:

• Code: 27
• Description: "Expenses incurred after coverage terminated"
• Group Code: PR (Patient Responsibility)
• Effective Date: January 1, 1995
• Status: Active (confirmed stable as of January 1, 2026)

When denial code 27 shows up on your remittance, the payer is officially stating that the patient's policy ended before your date of service. X12 last reviewed this code on January 1, 2026, and confirmed it remains active with the same definition it's had for nearly three decades.

What "PR" Means in PR-27

The "PR" prefix stands for Patient Responsibility. This group code assignment determines who bears financial liability for the claim. When a payer assigns the PR group code, they're officially shifting payment responsibility from the insurance company onto the patient.

Here's the thing: don't immediately send a bill to your patient just because you see a PR group code. Verify the termination date first. Payers make data entry mistakes and sometimes apply retroactive terminations incorrectly. If you can prove coverage was active when you verified eligibility, these denials are often appealable.

Patient responsibility only applies when the denial is accurate and legitimate.

Where PR-27 Appears

You'll encounter this denial code across several touchpoints in your revenue cycle:

• Explanation of Benefits (EOB): Paper or electronic statements from payers
• Electronic Remittance Advice (ERA/835): Standard electronic payment and adjustment data
• Payer portals: When checking claim status online
• Practice management system reports: Internal denial tracking and aging reports
• Clearinghouse denial reports: Aggregated rejection data from your clearinghouse

The PR-27 denial code description displays identically regardless of format. Training your team to recognize it across all these sources ensures you catch denials quickly. Most payers have 90 to 180 day appeal windows, so time matters.

PR-27 Quick Reference Table

What is CO-27 Denial Code? Understanding the Contractual Difference

The CO-27 denial code shares the same number as PR-27, but the group code changes everything. That two-letter prefix determines who can be billed and whether you'll see any payment at all.

CO-27 Official Definition

The CO 27 denial code uses "CO" for Contractual Obligation. The CO-27 denial code description is identical to PR-27: "expenses incurred after coverage terminated." Same words, completely different financial outcome.

Here's where it matters: contractual obligation means your agreement with the payer prohibits billing the patient for this denial. You've agreed to accept their determination as final. This typically happens with in-network contracted services where your participation agreement limits patient balance billing.

When you see CO instead of PR, check your payer contract before taking any collection action.

PR-27 vs CO-27: The Critical Difference

Understanding the difference between PR-27 and CO-27 comes down to one question: who pays?

With PR-27, the payer says the patient is financially responsible. You can pursue the balance from your patient after verifying the denial is accurate. The coverage truly terminated, and the patient owes you for services rendered.

The CO 27 denial code tells a different story. Your contractual obligation with the payer means you can't bill the patient. Even though coverage terminated, your in-network agreement often requires you to write off the balance. Billing the patient anyway could violate your contract terms.

The difference between PR-27 and CO-27 determines your entire workflow. One leads to patient billing; the other leads to a write-off adjustment. Miss this distinction, and you'll either leave money on the table or create compliance problems.

PR-27 vs CO-27 Comparison

Before you take action on any CO 27 denial code descriptions, pull your payer contract. Some agreements have exceptions or dispute processes that could recover the revenue. Don't assume a write-off is your only option until you've reviewed the specific terms.

What Does "Expenses Incurred After Coverage Terminated" Mean?

The phrase "expenses incurred after coverage terminated" appears on every PR-27 and CO-27 denial. Understanding exactly what payers mean by this language helps you decide whether to appeal or accept the denial.

Breaking Down the Official Language

Let's unpack this standard denial phrase piece by piece.

"Expenses incurred" simply means charges for services you provided. It's the billable amount for that visit, procedure, or treatment. "After coverage terminated" tells you the date of service falls after the patient's policy end date.

Here's what the payer is really saying: "On the date you provided this service, this person wasn't our member." They checked their records against your claim and found no active policy on that date. When "expenses incurred after coverage terminated" appears on your remittance, that date mismatch is the core issue.

Common Coverage Termination Scenarios

Coverage termination happens for different reasons. Knowing the cause points you toward the right resolution.

Job loss or change triggers most terminations. Patients leave employers and coverage typically ends at month's end. They often don't realize it happened.

Non-payment of premiums causes policies to lapse. The insurer cancels coverage, sometimes backdating the termination to when payments stopped.

COBRA expiration surprises patients. That 18-month window closes, and if COBRA termed before your service date, the claim won't pay.

Open enrollment switches create confusion. Patients move to new plans but present old cards. The previous insurer correctly denies because coverage termed when the new plan started.

Retroactive coverage termination frustrates everyone. You verified eligibility, but the payer later backdated the termination. Employers sometimes report changes late.

Medicare Advantage plan exits are critical for 2026. UHC and other carriers are leaving markets, affecting 600,000+ patients who'll present outdated cards in January.

Related Coverage Denial Scenarios

PR-27 has related denial types that look similar but require different approaches.

Expenses incurred prior to coverage triggers PR-26. Services happened before the policy effective date, not after termination. New patients with recently activated coverage often cause these.

Expenses incurred during lapse in coverage occurs when patients have gaps between policies. Neither the old nor new plan covers the gap period.

Each type involves different dates to verify and different resolution paths to pursue.

10 Common Causes of PR-27 Denial Code (And How Each Happens)

Understanding the common causes behind PR-27 denial code patterns helps you fix the underlying problems instead of just reworking individual denials. Here are the 10 most frequent reasons these denials show up on your remittance.

1. Failure to Verify Insurance Before Service

This ranks as the single most common cause of coverage termination denials. Front desk staff skips the eligibility verification step, especially when the waiting room is packed. The assumption: returning patients still have the same coverage they had last visit. That assumption costs practices thousands in preventable denials every month.

1. Outdated Patient Insurance Information

Your system has old policy numbers, outdated group IDs, or terminated plan information on file. Patients switch jobs, change plans during open enrollment, or lose coverage without telling your practice. A patient who changed jobs three months ago finally schedules an appointment, and your staff bills the old employer plan that's no longer active.

1. Delayed Claims Submission

Internal backlogs mean claims sit for weeks before submission. You file the claim 45 days after the service date, but the patient's coverage lapsed 30 days post-service. The delay created the problem. If you'd submitted within 48 hours, the claim would've paid before coverage ended.

1. Incorrect Termination Date Recorded

Payers make data entry mistakes. Their system shows a termination date of December 31 when the actual end date was January 31. You verify eligibility on January 15, it shows active, you provide services, and then receive a pr27 denial code because someone at the payer entered the wrong month. These are absolutely worth appealing with your verification documentation.

1. Patient Failed to Communicate Coverage Change

Lack of communication between patient and provider creates coverage gaps nobody knows about. A patient's spouse changes the family plan, switching carriers mid-year. The patient doesn't know it happened and presents the old card. Your staff doesn't ask about recent changes. The claim goes to a payer who correctly states this person isn't their member.

1. Retroactive Policy Termination

Payers discover premium non-payment weeks or months later and backdate the coverage termination. You verified active coverage on the service date, but the payer later applied retroactive termination to a date before your service. 2026 Update: New CMS rules restrict retroactive termination for Medicare Advantage plans, giving providers stronger appeal grounds when prior authorization was granted.

1. Coordination of Benefits (COB) Issues

Primary and secondary insurance confusion triggers coverage denials. A Medicare patient also has commercial coverage, but your staff bills the commercial plan first instead of Medicare. The commercial payer denies because they're actually secondary. Or you bill a terminated primary when active secondary coverage exists. Coordination of benefits mistakes look like coverage termination but are really sequencing errors.

1. COBRA Coverage Lapse

Patients miss COBRA premium payments without realizing coverage immediately stops. COBRA has a 30-day grace period, but once that expires, coverage terms retroactively. A patient assumes their COBRA continued, presents the card, receives services, and you discover later the coverage lapsed two months prior due to non-payment.

1. Medicare Advantage Plan Changes (2026 Critical)

NEW for 2026: UnitedHealthcare and other carriers are exiting multiple Medicare Advantage markets effective January 1, 2026. This affects over 600,000 patients who'll present old UHC cards at appointments. Without fresh eligibility verification for every MA patient in January, practices will see a surge of legitimate PR-27 denials because those patients truly are no longer covered by the plans shown on their cards.

1. Billing and Coding Errors

Simple data entry mistakes create false coverage termination denials. Someone transposes the date of service, showing 1/15 when the actual service date was 12/15, before the policy ended. Policy numbers get transposed. Patient demographics don't match payer records exactly. These errors make valid coverage look terminated.

PR-27 Denial Prevention Guide

Real-World Examples: How PR-27 Denials Happen in Practice

These three scenarios show exactly how PR-27 denials occur in real billing departments. You'll recognize these situations because they happen every day across thousands of practices.

Example 1: The Job Transition Gap

John works for ABC Company with United Healthcare coverage through his employer. He leaves his job on March 15th, and his coverage terminates March 31st. He starts a new job April 15th with Blue Cross coverage starting May 1st.

On April 20th, John visits his doctor for a routine appointment. He presents his UHC card out of habit, and the front desk doesn't ask about recent changes. The practice submits the claim to UHC.

Result: PR-27 denial with the description "expenses incurred after coverage terminated."

UHC is correct. John's coverage ended March 31st, two weeks before the April 20th service date. The claim should've gone to patient responsibility for the gap period before Blue Cross activated.

The lesson: Verify insurance at every visit, even for established patients. A simple "Has anything changed since your last visit?" catches most coverage switches.

Example 2: The Retroactive Termination

Sarah's employer-sponsored plan showed active when your staff verified eligibility on February 1st. She received services that day, and the claim was submitted February 5th. Everything looked clean.

On February 20th, the payer retroactively terminated Sarah's coverage back to January 15th due to employer premium non-payment. Your practice receives a PR-27 denial in March.

The lesson: This scenario is absolutely appealable. Attach your eligibility verification screenshot from February 1st showing active status at the time of service. You followed proper procedures and shouldn't be penalized for the payer's retroactive termination.

2026 Update: New CMS rules strengthen protections against retroactive Medicare Advantage plan denials, especially when prior authorization was granted. Reference these protections in your appeal language.

Example 3: The Medicare Advantage Switch (2026 Specific)

Margaret is a Medicare beneficiary who had UnitedHealthcare Medicare Advantage throughout 2025. Due to UHC's market exit, she was auto-enrolled in a different MA plan effective January 1, 2026.

At her January 15th appointment, Margaret presents her UHC card because she hasn't received new cards yet. Your front desk doesn't run a fresh eligibility check because she's been a patient for years. The claim goes to UHC.

Result: PR-27 denial because UHC correctly states Margaret wasn't their member on the service date.

The lesson: Implement mandatory "hard stop" eligibility verification for ALL Medicare Advantage patients in January 2026. Don't skip this step even for long-term patients. The 2026 MA plan exits affect 600,000+ members.

How to Resolve PR-27 Denial Code: 7-Step Resolution Process

Resolving PR-27 denial code denials requires a systematic approach. Follow these seven steps to fix denials efficiently and recover as much revenue as possible.

Step 1: Verify the Coverage Termination Date

Start by confirming the facts. Contact the payer directly or log into their eligibility portal to verify the exact policy effective and termination dates. Don't rely solely on what the denial states.

Document the termination date you receive and compare it against your date of service. This tells you whether you're dealing with a legitimate denial or a payer error.

Decision point: If your date of service falls before the termination date, proceed to Step 2 because you likely have a billing error or data mismatch. If the date of service is actually after termination, skip to Step 3 to find alternate coverage.

Step 2: Check for Billing or Documentation Errors

Review your claim submission for accuracy. Verify the date of service matches your records, the policy number is correct, and patient demographics are exact. Look for transposed numbers, typos in the subscriber ID, or wrong patient information.

Pull your eligibility verification from the service date if you performed one. Compare what you verified against what you submitted. Small data entry mistakes create coverage termination denials when coverage was actually active.

Decision point: If you find an error, correct it and handle the claim resubmission immediately. If everything's accurate and you have verification proof, move to Step 5 for appeal. If no error exists and no verification was done, proceed to Step 3.

Step 3: Contact the Patient

Call the patient to discuss the PR 27 denial code description you received. Ask directly: "Do you have new or updated insurance coverage?" and "Are you aware your coverage with [Payer Name] ended?"

Collect any new insurance information the patient provides. Discuss potential secondary coverage sources like a spouse's plan, Medicare if they're 65 or older, or Medicaid eligibility.

Decision point: If the patient provides new active coverage information, bill that payer immediately. If no coverage exists anywhere, you'll need to discuss payment options in Step 6.

Step 4: Check for Secondary Coverage

Verify whether secondary insurance exists before billing the patient. Check for Medicare eligibility through CMS if the patient is 65 or older. Verify Medicaid eligibility through your state system. Ask about spouse or partner coverage that might serve as secondary.

Run eligibility checks on any potential secondary sources you identify. Many patients don't realize they have secondary coverage until you ask.

Decision point: If you discover active secondary coverage, submit the claim there. If no secondary exists and the denial is legitimate, proceed to Step 5 to evaluate appeal options or Step 6 to bill the patient.

Step 5: Appeal If Appropriate

Filing a denial appeal makes sense in specific situations. Appeal when you have eligibility verification showing coverage was active on your service date. Appeal retroactive terminations where the payer backdated coverage end after you'd already verified and provided services.

2026 Update: If prior authorization was granted for an inpatient stay and you later received a retroactive PR-27 denial, cite the new CMS rule that restricts Medicare Advantage plans from reopening and modifying previously approved admissions.

Compile your appeal documentation: copy of eligibility verification from the service date, detailed claim information, and a letter explaining the error. Submit within the payer's appeal deadline, which typically ranges from 90 to 180 days depending on the plan.

Decision point: Strong appeals include verification screenshots and reference the 2026 CMS protections where applicable. If appeal isn't appropriate, proceed to Step 6.

Step 6: Bill the Patient (If Appropriate)

Only bill the patient after you've confirmed coverage truly was terminated, no secondary coverage exists, and the denial is valid and correct. Don't skip the verification steps above.

Provide an itemized statement showing the services and charges. Offer payment plan options to make the balance manageable. Consider whether your practice has financial hardship programs that might apply.

Document every patient communication about the balance.

Step 7: Document Everything

Maintain detailed records of every corrective action you take on this denial. Document dates, times, and names of payer representatives you speak with. Save screenshots of all eligibility verifications.

Keep copies of appeal submissions and any payer responses. This documentation supports future appeals if needed and helps identify whether you have systemic process problems causing repeated denials.

Good documentation turns individual denial fixes into practice-wide improvements.

Denial resolution is time-consuming. The average PR-27 denial requires 4+ staff hours to resolve. MedSole RCM's denial management team handles the entire process, from appeal filing to patient communication, so your team can focus on patient care. [See how we reduce denial rework time by 60%]

How to Appeal PR-27 Denials: Template & Best Practices

Not every PR-27 denial deserves an appeal. Some denials are legitimate and you'll waste time fighting them. Others are absolute errors worth pursuing. Here's how to appeal pr-27 denial situations strategically and what to include in your letter.

When to Appeal vs. Accept the Denial

Appeal these PR-27 denials because you'll likely win:

• Eligibility was verified as active on the date of service and you have proof
• Prior authorization was granted for the service (especially important for 2026 Medicare Advantage claims)
• Retroactive termination was applied after you'd already verified and provided services
• Payer data entry error shows the wrong termination date

Accept these denials and move to patient billing or write-off:

• Coverage truly was terminated before your service date
• Patient confirms they had no active coverage on that date
• No supporting documentation exists to prove active coverage

The issue is documentation. Can you prove the payer is wrong? If yes, appeal. If no, move on.

Appeal Letter Structure

Effective denial appeal letters follow a specific structure that payers expect. Skip any of these elements and you'll likely get a quick denial.

Header section: Include your practice information, patient name and ID, claim number, date of service, and the specific denial code you're appealing.

Introduction paragraph: State clearly that you're appealing PR-27 denial for claim number [X]. Don't make the payer guess what you want.

Explanation section: Explain precisely why the denial is incorrect. Reference your eligibility verification, the date you performed it, and what it showed. Be specific about facts.

Evidence reference: List every piece of supporting documentation you're enclosing. Screenshots of eligibility checks, copies of insurance cards, prior authorization approvals.

Request statement: Ask specifically for claim reprocessing and payment according to your contracted rates. Don't assume they'll know what you want.

Contact information: Provide a direct phone number where payer staff can reach your billing team with questions.

Tone matters here. Professional and assertive works. Angry or defensive doesn't. State facts and let your documentation do the work.

Sample PR-27 Denial Appeal Letter Template

Here's exactly what an effective appeal letter looks like:

[PRACTICE LETTERHEAD]

[Date]

[Insurance Company Name]
[Appeals Department Address]

RE: Appeal of Denial Code PR-27
Patient Name: [Patient Name]
Member ID: [Member ID]
Claim Number: [Claim Number]
Date of Service: [DOS]
Denial Code: PR-27 (Expenses incurred after coverage terminated)

Dear Appeals Committee:

We are writing to formally appeal the above-referenced claim denial. According to our eligibility verification conducted on [verification date], the patient's coverage was ACTIVE at the time of service.

Supporting Documentation Enclosed:
• Eligibility verification screenshot dated [date] showing active status
• Copy of insurance card on file
• Claim submission details

The PR-27 denial appears to be issued in error, as our records confirm active coverage on [DOS]. We respectfully request that this claim be reprocessed and reimbursed according to our contracted rates.

[FOR 2026 MA CLAIMS: We also note that per the 2026 Medicare Advantage Final Rule, retroactive denial of prior-authorized inpatient services is restricted.]

Please contact our billing department at [phone] with any questions.

Sincerely,
[Provider/Billing Manager Name]
[Practice Name]
[Contact Information]

📥 Download our complete PR-27 Appeal Letter Template Kit: Includes three letter variations, required documentation checklist, and payer-specific submission guidelines. 

8 Proven Strategies to Prevent PR-27 & CO-27 Denials

Prevention stops PR-27 denial and CO-27 denial issues before they cost you revenue. Here's how to prevent pr-27 denials through process improvements that address the most common denials in medical billing.

1. Implement Real-Time Eligibility Verification

Verify every patient at every visit without exceptions. This single step prevents the majority of coverage termination denials you'll encounter.

Use automated real-time eligibility tools integrated with your EHR or practice management system. Run checks 24 to 48 hours before scheduled appointments, then verify again at check-in. Coverage can terminate between appointment scheduling and actual service dates.

Capture screenshots of every verification and save them to patient accounts. This documentation proves you did your due diligence when payers later apply retroactive terminations.

2. Establish Front Desk Verification SOPs

Create written standard operating procedures that make eligibility verification mandatory, not optional. Your front desk staff needs clear rules about when verification happens and what to do when it fails.

Require a "hard stop" if verification shows inactive coverage. Don't let patients proceed to appointments without resolving coverage questions first. Train staff to collect updated insurance information at every single visit, regardless of how recently the patient was seen.

3. Implement Patient Communication Protocols

Send pre-visit reminders that specifically ask patients to bring their current insurance card to the appointment. Don't assume they'll remember or that the card on file is still valid.

Train front desk staff to ask every patient: "Has your insurance changed since your last visit?" Make it a standard question asked of every patient, every time. Educate patients about why reporting coverage changes immediately matters. When they understand delayed billing and unexpected patient balances, they're more likely to communicate proactively.

4. Submit Claims Within 24-48 Hours

Same-day or next-day claim submission dramatically reduces termination risk. The longer you wait, the more likely coverage will lapse between service date and submission date.

Set internal submission deadlines well ahead of payer filing limits. Don't use the 90-day or 180-day payer deadline as your target. Use automated claim submission workflows that push claims out as soon as services are documented and coded.

5. Use Claims Scrubbing Tools

Implement pre-submission claim scrubbing that catches errors before claims leave your system. Good scrubbing tools flag inactive coverage, data entry mistakes, and policy number issues.

Scrubbers identify the data entry errors that make active coverage look terminated. Transposed policy numbers, wrong group IDs, and demographic mismatches get caught before they trigger denials.

6. Conduct Monthly Denial Audits

Track PR-27 and CO-27 denial trends every month. Raw denial counts don't tell you much; you need to identify root cause patterns behind the denials.

Look for systemic issues tied to specific staff members, specific payers, or specific patient types. When you see patterns, you can address the underlying cause instead of just reworking individual claims. This is where denial management shifts from reactive to proactive.

7. Stay Updated on Payer Policy Changes

Monitor payer bulletins and policy updates for coverage changes that affect your claims. Payers announce major changes weeks or months in advance, giving you time to prepare.

2026 Critical: Track Medicare Advantage plan exits and market changes closely. Carriers are leaving markets, affecting hundreds of thousands of patients who'll present outdated cards. Subscribe to payer update notifications and share relevant changes with your billing team immediately. Don't assume your team sees the same emails you do.

8. Invest in Staff Training

Regular training on insurance verification importance keeps front desk staff focused on prevention. New hires need immediate training; existing staff needs annual refreshers.

Provide payer-specific training for your highest-volume payers. Their verification portals, policy structures, and termination patterns differ. Run coverage termination scenario training so staff knows what to do when they encounter inactive coverage at check-in.

Download the PR-27 Resolution Flowchart

Print this one-page visual guide and post it in your billing department. 
It walks through every decision point from denial receipt to resolution.

**[Download Flowchart PDF]** — Free, no email required

[Ungated or light gate: Email only]

Download the PR-27 Resolution Flowchart

Print this one-page visual guide and post it in your billing department. 
It walks through every decision point from denial receipt to resolution.

**[Download Flowchart PDF]** — Free, no email required

[Ungated or light gate: Email only]

2026 Policy Updates: What's Changed for PR-27 Denial Code

The 2026 landscape brings significant changes that affect how you'll handle PR-27 denial code issues. Some updates protect providers; others create new risks you need to prepare for immediately.

Major Win: CMS Retroactive Denial Protection (2026)

The 2026 Medicare Advantage Final Rule delivers a crucial protection against retroactive termination practices. MA plans can no longer "reopen and modify" previously approved inpatient admissions to trigger denials later.

Here's what changed: If you received prior authorization for an inpatient stay, the MA plan approved the admission, and the patient received care; that approval stands. Payers can't come back weeks or months later claiming the patient wasn't eligible and issuing a medicare denial code 27.

This rule specifically addresses retroactive termination abuse where MA plans would approve services, then discover coverage issues later and deny payment. Before 2026, you'd eat that cost. Now you have solid appeal grounds.

Action required: When you receive PR-27 for a prior-authorized inpatient stay, cite the 2026 Medicare Advantage Final Rule in your denial appeal. Include your prior authorization approval documentation. Reference that the rule prohibits reopening previously approved admissions. This gives you leverage that didn't exist before January 2026.

Major Risk: UnitedHealthcare Market Exits (2026)

UnitedHealthcare and other major carriers are exiting Medicare Advantage markets effective January 1, 2026. This affects over 600,000 members who need new coverage immediately.

The problem for your practice: Patients don't understand their coverage changed. They'll present UHC cards at January appointments because new cards haven't arrived yet. Your front desk sees a familiar patient with a familiar card and skips verification.

Without fresh eligibility checks, you'll submit claims to UHC for patients who aren't their members anymore. UHC will correctly issue PR-27 denials because coverage terminated December 31, 2025. These denials are valid and you can't appeal them.

Action required: Implement mandatory eligibility verification for ALL Medicare Advantage patients during January 2026. Don't accept any MA card at face value this month. Create "hard stop" protocols that require fresh verification regardless of patient history. Train staff that the usual verification shortcuts don't apply when carriers exit markets. Check every patient, every visit, no exceptions.

X12 CARC Status (January 2026 Confirmation)

Good news for consistency: CARC 27 remains unchanged as of January 1, 2026. X12's last review confirmed the code maintains stable status with no pending change requests.

The definition stays exactly as it's been since January 1, 1995: "Expenses incurred after coverage terminated." Your current processes for handling this code don't need updates. Code 27 functions the same way it always has.

What matters is the context around the code changes, not the code itself.

2026 PR-27 Impact Summary

UpdateImpactAction RequiredCMS Retroactive Denial Rule Positive—appeal protectionCite in MA plan appealsUHC Market ExitsRisk - 600K+ membersJanuary eligibility checksX12 CARC 27 StatusStableNo change to processes

PR-27 Denial by Payer: Medicare, BCBS, UHC & More

Each payer handles denial code 27 in medical billing differently. Knowing their specific quirks saves you time on resolution and helps you target your appeals correctly.

Medicare & Medicare Advantage

Original Medicare rarely issues PR-27 denials. You'll typically see CO-27 instead because Medicare considers itself primary and shifts contractual obligations rather than patient responsibility.

Medicare Advantage plans work differently. They commonly issue medicare denial code 27, especially when patients switch plans or lose eligibility. The appeal process runs through the MA plan's internal system first, not CMS directly.

2026 Note: MA plan changes in January will trigger a spike in PR-27 denials. Patients presenting old cards won't realize their plan terminated. When appealing MA denials for retroactive terminations, cite the new 2026 CMS rule that restricts reopening previously authorized inpatient stays. This gives you leverage that didn't exist last year.

Blue Cross Blue Shield (BCBS)

BCBS denial code 27 typically stems from employment changes or plan switches during open enrollment. Each state's BCBS operates independently, so check your specific state portal for eligibility verification.

Most Blue Cross Blue Shield denial code 27 issues have 90-day appeal windows, though some states allow up to 180 days. When appealing, provide your eligibility verification screenshot from the service date. BCBS responds well to documentation showing you verified coverage before providing services.

United Healthcare (UHC)

United Healthcare PR-27 denials spike when employer groups change plans or terminate coverage. UHC's notorious for delayed processing that creates retroactive terminations weeks after services.

2026 Critical: UHC is exiting multiple Medicare Advantage markets, affecting hundreds of thousands of members. Verify every UHC MA patient through the UHCProvider.com portal, not by phone. Submit appeals through their online portal or dedicated fax lines. Phone appeals rarely get documented properly with UHC.

Aetna, Cigna & Other Commercial Payers

Commercial payers generally follow similar resolution patterns. Check each payer's specific appeal deadline; they range from 60 to 180 days. Don't assume they're all the same.

Use payer portals for real-time eligibility verification rather than phone calls. Portal screenshots provide better documentation for appeals. Always document verification attempts, even when systems are down.

Payer-Specific PR-27 Quick Reference

Common Confusion: Modifier 27 vs. Denial Code 27

New billing staff often confuse modifier 27 with denial code 27. They're completely different things that happen to share the same number. Here's what you need to know.

What is Modifier 27?

What is modifier 27? It's a CPT modifier used exclusively by hospital outpatient departments and emergency rooms when multiple E/M encounters occur on the same date.

CMS defines the 27 modifier description as "Multiple outpatient hospital E/M encounters on the same date." Only facilities can use it, not physician practices. When a patient sees different providers in the hospital's clinic and emergency department on the same day, modifier 27 tells the payer these were separate, necessary encounters.

This has nothing to do with denial code 27. One's a billing tool; the other's a rejection reason.

Why the Confusion Occurs

Both use the number "27," which creates the mix-up. Staff see "27" and don't immediately know which one they're dealing with.

Context tells you everything. Modifier 27 appears on claim forms when you're submitting charges. Denial code 27 shows up on EOBs and remittance advice when claims get rejected. One helps you bill correctly; the other tells you why payment was denied.

Modifier 27 vs. Denial Code 27 Quick Reference

Download the 2026 Medicare Advantage Changes Quick Reference

One-page summary of everything your team needs to know about 2026 
MA plan changes, CMS protections, and which carriers exited which markets.

[Download 2026 MA Guide]

Download the Payer Contact & Appeal Deadline Cheat Sheet

One-page reference with appeal deadlines, portal URLs, fax numbers, 
and mailing addresses for major payers. Post it in your billing area.

[Download Payer Cheat Sheet]

Frequently Asked Questions About PR-27 & CO-27 Denial Codes

Q1: What does denial code PR-27 mean?

Denial code PR-27 means "expenses incurred after coverage terminated." This indicates the patient's insurance coverage wasn't active on the date of service, and the insurer is placing financial responsibility on the patient. The PR designates "Patient Responsibility," telling you who should receive the bill for services rendered.

Q2: What is the difference between PR-27 and CO-27?

The difference between PR-27 and CO-27 is who bears financial responsibility. PR-27 (Patient Responsibility) means you can bill the patient directly after verifying the denial is accurate. CO-27 (Contractual Obligation) means your provider-payer contract typically prohibits billing the patient, often requiring a write-off. Both indicate coverage was terminated, but the financial implications differ completely.

Q3: How do I fix a PR-27 denial?

To fix a PR-27 denial: verify the coverage termination date, check for billing errors, contact the patient for updated insurance information, submit to any secondary coverage found, appeal if coverage was active on the service date, or bill the patient if the denial is valid. Each step determines whether you'll recover payment or need to pursue patient responsibility.

Q4: Can I appeal a PR-27 denial?

Yes, you can appeal a PR-27 denial if you have evidence that coverage was active on the date of service. Submit your eligibility verification documentation showing active status at the time you provided services. In 2026, new CMS rules provide additional appeal grounds for retroactively denied Medicare Advantage claims.

Q5: What causes denial code 27?

Denial code 27 is caused by services rendered after a patient's insurance coverage ended. Common causes include job changes, non-payment of premiums, policy expiration, failure to verify eligibility, outdated patient information, retroactive policy termination, and COBRA coverage lapses. Most are preventable with proper eligibility verification.

Q6: What is patient responsibility 27?

Patient Responsibility 27 (PR-27) is a denial code indicating that the patient's insurance was inactive on the service date, making the patient financially responsible for the charges. The "PR" designation means the patient, not the insurance, should pay for services.

Q7: What is PR 27 in EOB?

PR 27 in an EOB (Explanation of Benefits) indicates that the claim was denied because "expenses were incurred after coverage terminated." This appears when the date of service falls after the patient's insurance policy termination date.

Q8: How do I prevent PR-27 denials?

Prevent PR-27 denials by implementing real-time eligibility verification before every patient visit, updating patient insurance information at each appointment, submitting claims within 24 to 48 hours, and training staff to ask patients about coverage changes at check-in.

Q9: Is the patient responsible for PR-27?

Yes, with PR-27 (Patient Responsibility), the patient is typically financially responsible for the charges. However, always verify the termination date is accurate before billing the patient, as errors or retroactive terminations may be appealable.

Q10: What is the occurrence code 27 for Medicare?

Occurrence code 27 for Medicare indicates "Date home health plan of care certification/recertification was obtained." This is different from denial code 27. Occurrence code 27 is used on institutional claims when certifying home health services; it's not related to coverage termination.

Q11: What does denial code PR-227 mean?

Denial code PR-227 means "Information requested from the patient/insured/responsible party was not provided." This is different from PR-27. PR-227 indicates missing patient information is needed to process the claim, not a coverage termination issue.

Q12: What is the 2026 CMS rule for PR-27 denials?

The 2026 Medicare Advantage Final Rule restricts MA plans from reopening and retroactively denying previously approved inpatient admissions. If you received prior authorization for an inpatient stay and later received PR-27, you may have grounds for appeal citing this new rule's protection against retroactive denials. This gives providers stronger appeal leverage.

Conclusion: Take Control of PR-27 & CO-27 Denials

PR-27 denial code and CO-27 denial issues indicate services were rendered after a patient's coverage terminated. These denials drain revenue and strain patient relationships when unexpected bills arrive. Now you understand the causes, resolution steps, and prevention strategies that make the difference between lost revenue and protected cash flow. Whether you're appealing retroactive terminations or implementing front desk verification protocols, the knowledge in this guide gives you what you need to reduce these denials significantly.

Prevention costs less than resolution. Real-time eligibility verification, updated patient information at every visit, and timely claim submission form the foundation of effective denial prevention. Get these basics right, and you'll see PR-27 denial code numbers drop.

The 2026 landscape brings both opportunities and risks. New CMS protections strengthen your appeal position for Medicare Advantage retroactive denials. But MA market exits mean fresh verification is mandatory for every patient in January. Practices that adapt their workflows now will navigate the year successfully.

Ready to reduce your PR-27 denial rate? MedSole RCM specializes in denial prevention and resolution for healthcare providers. Our team handles eligibility verification, denial management, and appeals so you can focus on patient care. [Schedule a Free Denial Analysis] and see how we can recover your lost revenue.

About the Author

Andrew Christian, CPC, CPMA, AAPC Certified
Senior Revenue Cycle Consultant at MedSole RCM

Andrew Christian brings 15 years of experience in healthcare revenue cycle management, specializing in denial prevention and payer negotiations. He has helped healthcare providers recover over $12M in denied claims and reduce denial rates by an average of 35%.

Andrew is certified by the American Academy of Professional Coders (AAPC) and regularly contributes to healthcare billing education.

Medical Review

This article was reviewed for accuracy by Sarah Mitchell, CCS-P, CPC, with 18 years of experience in healthcare billing and coding.

Last Updated: January 24, 2026

Related Guides from MedSole RCM

📚 Continue Learning:

• [Complete Guide to Denial Management in Healthcare]
• [CO-16 Denial Code: Complete Guide to Description, Causes, Fixes & Prevention]
• [CO-97 Denial Code: What It Means, Why It Happens & How to Fix It]
• [Eligibility Verification Best Practices]
• [How to Reduce Your Practice's Denial Rate]
• [Revenue Cycle Management Services]