PR-106 Denials Explained: How to Identify, Appeal, and Prevent Them

Healthcare revenue cycle management (RCM) teams face numerous challenges, with claim denials being among the most common hurdles. One particularly frustrating denial code is PR-106, which directly impacts patient responsibility and payment processing. Left unaddressed, this denial can lead to revenue leakage, operational inefficiencies, and prolonged accounts receivable.

In this blog, we’ll break down the PR-106 denial code, explain its causes, explore its impact on healthcare organizations, and provide actionable steps to appeal and prevent it in the future.

What Is a PR-106 Denial?

The PR-106 denial code signals that the patient’s selected payment option or plan election is not active or valid at the time of service. The “PR” prefix stands for “Patient Responsibility,” meaning the patient is financially liable for the service rendered. This denial occurs when the payer determines that the patient’s coverage or payment arrangement doesn’t support the billed claim.

Understanding the structure of denial codes is crucial for RCM teams. For example:
- PR (Patient Responsibility): Indicates the patient owes this amount.
- CO (Contractual Obligation): Refers to adjustments required by payer-provider contracts.
- OA (Other Adjustment): Represents other adjustments unrelated to patient or payer responsibility.

PR-106 denials often require RCM teams to not only resolve the issue with the payer but also coordinate with patients to address payment responsibilities or coverage discrepancies.

Comparison: PR-106 vs Similar Denial Codes

Denial Code	Prefix Meaning	Reason/Description	Who's Financially Responsible
PR-106	Patient Responsibility	Patient payment option/election not in effect.	Patient
PR-204	Patient Responsibility	Not covered by patient’s plan.	Patient
CO-109	Contractual Obligation	Service not covered under payer contract.	Provider

While PR-106 and PR-204 both involve patient responsibility, PR-204 is tied to services excluded from the patient’s plan, whereas PR-106 occurs due to inactive payment options. On the other hand, CO-109 places the financial burden on the provider due to contractual agreements with the payer.

Common Causes of PR-106 Denials

1. Expired Insurance Coverage: The patient’s insurance policy or payment plan has lapsed or is no longer valid.
2. Incorrect Insurance Information: Errors in demographic or insurance details during patient registration.
3. Non-compliance with Plan Terms: The patient’s payment option or plan does not cover the specific service rendered.
4. Coordination of Benefits (COB) Issues: Incorrect or missing primary payer information leading to denial.
5. Failure to Verify Eligibility: Lack of up-to-date eligibility verification prior to rendering services.

Impact on Revenue Cycle Teams

PR-106 denials can have a cascading effect on both financial and operational performance, creating challenges for healthcare providers.

Financial Impact

• Denied claims reduce revenue and require time-consuming rework to recover payments.
• Increased days in accounts receivable (AR) can strain cash flow, delaying reimbursements.
• If appeals are not submitted in time, these claims may result in write-offs, leading to further revenue leakage.
• Additional costs arise from allocating resources to manage and resolve denials.

Operational Impact

• RCM staff must dedicate substantial time to researching denials, reducing efficiency in other tasks.
• Resolving PR-106 denials requires a deep understanding of payer-specific rules, often necessitating specialized training.
• Collaboration between front-end staff, billing teams, and clinical departments becomes critical.
• Identifying patterns and trends in PR-106 denials requires coordinated tracking and reporting.

To mitigate these challenges, an advanced denial management solution like CombineHealth.ai’s Adam (AI Denial Manager) can help healthcare organizations automate denial tracking, streamline resolution processes, and reduce revenue loss.

Steps To Appeal a PR-106 Denial

Step 1: Review the Denial Notice

Carefully examine the Explanation of Benefits (EOB) or Remittance Advice (RA) to confirm the reason for the denial and determine that it is indeed PR-106.

Step 2: Gather Documentation

Collect all necessary documents, including the patient’s insurance card, payment option details, and any relevant clinical documentation to support the claim.

Step 3: Verify Eligibility

Confirm the patient’s insurance coverage and benefits for the date of service. Check for errors in policy numbers, plan information, or primary/secondary payer details.

Step 4: Prepare Appeal Letter

Draft a detailed appeal letter addressing why the denial was issued in error, referencing specific policy terms, and including supporting documentation.

Step 5: Submit Within Deadline

Adhere to the payer’s appeal submission deadlines. Late submissions risk forfeiting the opportunity to recover reimbursement.

Step 6: Track and Follow Up

Monitor the status of the appeal and maintain communication with the payer. Use denial management tools to track progress and escalate if necessary.

How To Prevent PR-106 Denials

Front-End Prevention

• Conduct Real-Time Eligibility Checks: Verify insurance coverage and payment options at the time of scheduling and registration.
• Train Front Desk Staff: Equip your team with the knowledge to accurately capture and verify patient insurance and demographic data.

Billing Best Practices

• Submit Accurate Claims: Ensure claims are error-free and comply with payer-specific guidelines.
• Review Coordination of Benefits (COB): Confirm primary and secondary payer designations to avoid COB-related denials.

Technology Solutions

• Automate Eligibility Verification: Use tools like CombineHealth.ai’s Adam to verify patient coverage in real-time and flag inactive payment options before services are rendered.
• Deploy AI-Powered Denial Management: Leverage Rachel (AI Appeals Manager) to automatically identify, categorize, and appeal PR-106 denials, reducing the burden on staff and increasing recovery rates.

FAQs

Q1: What does PR-106 mean in medical billing?
PR-106 indicates that the patient’s payment option or plan election was not active or valid at the time of service, making the patient financially responsible.

Q2: Can PR-106 denials be appealed?
Yes, PR-106 denials can be appealed by providing documentation to demonstrate that the patient’s payment option or insurance coverage was valid.

Q3: How long do I have to appeal?
Appeal deadlines vary by payer. It’s crucial to review the payer’s denial notice for specific timeline requirements to avoid missing deadlines.

Q4: How can I prevent these denials?
Prevent PR-106 denials by implementing real-time eligibility verification, training staff on accurate data capture, and leveraging advanced denial management tools. See our complete guide on denial prevention.