What are CARCs, the claim adjustment reason codes on a payment?
When a payer pays less than you billed, or nothing at all, the remittance states the reason as a claim adjustment reason code (CARC): 45 for a charge above the allowed rate, 29 for a late claim, 197 for a missing authorization. A group code in front, such as CO or PR, shows whether you or the rider carries the amount.
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How a CARC reads on a remittance
Every adjustment on a remittance carries three pieces: a group code, a reason code, and a dollar amount. The electronic version is the X12 835 payment and remittance transaction that HIPAA adopted at 45 CFR 162.1602, and Medicare uses the same codes on its paper remittances. A line might read CO-45 for $12.50: a contractual reduction of $12.50 because the charge was above the allowed amount.
The group code decides who absorbs the amount. X12 lists four current group codes:
| Group | Name | What it means for you |
|---|---|---|
| CO | Contractual Obligation | A contract or regulation caused the adjustment. CMS describes it as generally a provider write-off that is not billed to the rider. |
| PR | Patient Responsibility | Billable to the rider, typically a deductible or copay the plan allows. |
| OA | Other Adjustment | The catch-all group. X12 reserves duplicates (code 18) and prior-payer effects (code 23) for it. |
| PI | Payor Initiated Reduction | Started by the payer itself. Medicare does not use this group on its remittances. |
Each adjustment amount gets exactly one reason code. A line with two separate reductions shows two adjustments. See our guide to NEMT remittance advice for how the rest of the 835 fits together.
CARCs that come up on NEMT claims
Each code below has a longer official description on the X12 list. The middle column puts it in plain terms, and the last column is the usual first step.
| CARC | What it means in plain terms | Usual first step |
|---|---|---|
| 16 | Something on the claim is missing or wrong | Find the field the remark code names, correct it, and resubmit |
| 18 | The payer already has this exact claim (group OA, outside some workers’ comp cases) | Confirm whether the original paid before doing anything else |
| 22 | Another insurer may owe first | Bill that coverage first. See third-party liability |
| 24 | The benefit sits with the rider’s managed care plan | Send the trip to the plan or its broker instead of fee-for-service |
| 27 | Coverage had ended before the trip | Confirm eligibility for the date of the ride |
| 29 | Filed after the deadline | Look for a filing exception. See timely filing limits |
| 31 | The payer cannot match the rider to a member | Fix the member ID, name, or date of birth |
| 45 | The charge was above the allowed rate | Nothing to fix. Post the reduction |
| 96 | The service is not covered | The remark code gives the reason |
| 97 | Already paid as part of another service | Check whether the item belongs inside the base rate |
| 109 | Wrong payer for this rider or service | Find the responsible payer and send it there |
| 197 | No authorization on file | Match the trip to its authorization, or request one if the payer allows it late |
| B7 | You were not certified or eligible to be paid for this service on the trip date | Check your enrollment dates and approved services |
A CO-45 line is good news: the claim paid, just at the fee schedule or contract rate instead of your full charge. Because X12 bars a 45 adjustment from equaling the entire charge, a line paid at zero always carries some other code.
How remark codes add the detail
A remittance advice remark code (RARC) narrows down the reason. CARC 16 tells you something was missing. The remark code tells you what. Examples of remark codes that can point at a specific error on a NEMT claim:
- N382: missing, incomplete, or invalid patient identifier.
- N290: missing, incomplete, or invalid rendering provider primary identifier.
- M51: missing, incomplete, or invalid procedure code.
- N822: missing procedure modifier, such as an origin and destination modifier.
- M53: missing, incomplete, or invalid days or units of service. On a per-mile code, the units are the miles.
- N479: missing explanation of benefits from the primary payer.
- N30: patient ineligible for this service.
- MA130: the payer could not process the claim as sent. There is nothing to appeal, so file a fresh, corrected claim.
CAQH CORE operating rules require payers to use standard CARC and RARC combinations on the 835, and that combination list is also refreshed three times a year. Our guide to NEMT claim denials covers how to work a denial queue, and clean claims explains how to head off many of them before they appear.
Frequently asked questions
- Who maintains the CARC list, and how often does it change?
- The Claim Adjustment Status and Reason Code Maintenance Committee maintains the code set, and X12 publishes the official list. CMS says the list is updated three times a year. Remark codes are a separate list that CMS maintains. Medicare contractors are told to use only the most current valid codes, so an old code list can mislead you.
- Is an amount marked CO something the rider owes?
- Generally no. CMS describes CO adjustments as the result of a contract or regulation and says they are usually written off, not billed to the patient. PR marks amounts the patient can be asked to pay, a deductible or copay for example.
- Why does a remittance still show CARC 15?
- It should not on current remittances. Code 15, for a missing or invalid authorization number, stopped being valid on May 1, 2018. The current code for a missing authorization is 197, "Precertification/authorization/notification/pre-treatment absent." A remark code such as N54 can add that the claim does not match what was approved.
- How is a CARC different from a remark code?
- The CARC names the reason the money changed. The remark code, or RARC, narrows it down, for example by pointing at the field that was wrong. With some CARCs, including 16 and 96, X12 insists on at least one remark code of the explanatory kind. Remark codes that start with "Alert:" only share processing information. X12 says they never relate to a specific adjustment.
