PI-278: Performance Program Proficiency Requirements Not Met
The payer reduced payment based on their performance assessment. Request the detailed scorecard, verify the data, and dispute if incorrect.
What Does PI-278 Mean?
PI-278 is a payer-initiated reduction based on the payer's assessment of your performance against program requirements. The payer determined you did not achieve the required proficiency level and applied a payment adjustment accordingly.
CARC 278 indicates a payment adjustment because the provider failed to meet the proficiency requirements of a quality or performance program. These programs — including CMS's Merit-based Incentive Payment System (MIPS), commercial value-based payment arrangements, and other pay-for-performance contracts — set specific benchmarks that providers must achieve to receive full payment.
The adjustment can stem from genuinely failing to meet quality metrics, but it can also result from incomplete or incorrect data reporting. If the provider met the benchmarks but the data was not properly submitted or was submitted late, the payer may incorrectly apply the adjustment. The 835 Healthcare Policy Identification Segment (loop 2110 REF) typically identifies which specific program triggered the adjustment.
This code uses only Group Codes CO or PI. Under CO, the adjustment is treated as a contractual obligation — the provider agreed to the performance terms and did not meet them. Under PI, the payer initiated the reduction based on their assessment of the provider's performance metrics.
Common Causes
| Cause | Frequency |
|---|---|
| Payer-initiated performance adjustment The payer applied a payment reduction based on the provider's performance metrics under a value-based or quality incentive program | Most Common |
| Performance score below required threshold The provider's composite performance score fell below the minimum threshold needed to receive full payment under the program | Common |
How to Resolve
Identify the specific performance program from the 835 remittance, review your performance data, and either correct reporting errors or develop an improvement plan for future periods.
- Review the remittance Check the 835 detail for the specific performance program and adjustment amount.
- Request the performance scorecard Contact the payer to obtain the full performance report showing which metrics triggered the reduction.
- Dispute if data is wrong If the payer used incorrect performance data, submit corrected metrics with supporting documentation.
- Implement quality improvements Address the performance gaps identified to meet proficiency thresholds in future measurement periods.
If the payer used incorrect performance data, submit an appeal with corrected quality metrics and supporting documentation. Contact the payer for the detailed performance report to identify specific errors.
How to Prevent PI-278
- Proactively review payer performance scorecards to identify areas needing improvement before adjustments are applied
- Engage with performance programs early to understand measurement criteria and thresholds
- Implement continuous quality improvement processes aligned with each payer's metrics
General Prevention
- Proactively review performance scorecards from payers to identify areas needing improvement
- Engage with payer performance programs early to understand measurement criteria
- Implement continuous quality improvement processes aligned with payer metrics
Also Filed As
The same CARC 278 may appear with different Group Codes:
Sources
- https://www.mdclarity.com/denial-code/278
- https://x12.org/codes/claim-adjustment-reason-codes
- Codes maintained by X12. Visit x12.org for official definitions.