CARC and RARC Denial Codes, Explained in Plain English
Every denial your practice receives is delivered in code — a group code, a CARC and usually a RARC. This guide explains what each part means, lists the CARC denial codes practices see most often, and gives the standard fix for each one, so a remittance stops being a puzzle and becomes a work list.
What Are CARCs and RARCs?
When a payer adjudicates a claim and does not pay it in full, it has to say why, and it says it in standardized codes rather than sentences. Two code sets do the explaining:
- CARC — Claim Adjustment Reason Code. The main reason a claim or service line was adjusted: denied, reduced, bundled, applied to the deductible, and so on. CARCs are the codes billers mean when they say "denial codes," and they are maintained nationally so that the same code carries the same meaning across payers.
- RARC — Remittance Advice Remark Code. A supplemental explanation that adds detail to the CARC — often the specific missing item or the precise circumstance behind the adjustment. RARCs begin with a letter, most commonly "N," and they never appear alone: a RARC always rides alongside a CARC.
Read together, the pair answers two questions: what happened to this claim, and what exactly does the payer want done about it. A biller who reads both codes before touching the claim works faster and appeals less, because the RARC frequently names the fix the CARC only implies.
Where You See Them: The 835, the ERA and the EOB
These codes reach your practice on the remittance. Most practices receive it electronically as the 835 file, displayed in their software as an ERA (electronic remittance advice); the paper equivalent is the explanation of benefits or provider remittance notice. On every adjusted line you will see the same three-part construction:
- A group code assigning financial responsibility (covered next)
- The CARC stating the reason for the adjustment
- One or more RARCs adding detail, where the payer supplies them
The construction matters because the same CARC under two different group codes means two different actions. CO-50 is a write-off you generally cannot bill to the patient. PR-1 is money the patient owes. Reading only the number and skipping the group code is how collectible balances get written off and non-collectible ones get billed to patients in error.
Group Codes Come First: CO, PR, OA and PI
The group code is the two-letter prefix in front of every adjustment, and it decides whose money is at stake:
- CO — Contractual Obligation. The adjustment belongs to the provider under the payer contract: a contractual write-off, a bundling rule, a filing-limit loss. CO amounts generally cannot be billed to the patient.
- PR — Patient Responsibility. The amount is the patient's to pay: deductible, coinsurance, copayment, or a service the plan leaves to the member. PR amounts move to patient billing.
- OA — Other Adjustments. A catch-all used when no other group fits — most famously when another payer is primary and this claim must follow coordination-of-benefits rules.
- PI — Payer Initiated Reductions. The payer reduced or denied payment on its own initiative, for example a medical-necessity or policy determination, where the patient is not liable but the provider may be able to appeal.
Practical rule: read the group code to learn who bears the amount, the CARC to learn why, and the RARC to learn what to do next.
The Most Common CARC Codes — and the Standard Fix for Each
The list below covers the reason codes that drive most denial volume in most practices. Meanings are the standard national definitions; the fix is the usual first move, and individual payer contracts can add their own wrinkles.
| Code | What it means | Standard fix |
|---|---|---|
| CO-4 | The procedure code is inconsistent with the modifier used, or a required modifier is missing | Review the code/modifier combination against the documentation and resubmit a corrected claim |
| CO-11 | The diagnosis is inconsistent with the procedure | Check diagnosis-to-procedure matching and pointers; correct the coding or document the medical necessity |
| CO-16 | The claim lacks information or has a submission/billing error | Read the accompanying RARC — it names the missing item; supply it and resubmit |
| CO-18 | Exact duplicate claim or service | Do not rebill. Check claim status on the original; if it never processed, resolve the duplicate flag with the payer |
| CO-22 | This care may be covered by another payer per coordination of benefits | Confirm the primary payer, bill it first, then submit with the primary remittance attached |
| CO-27 | Expenses incurred after coverage was terminated | Verify eligibility for the date of service; bill the coverage that was actually in force, or move to patient responsibility per policy |
| CO-29 | The time limit for filing has expired | Check for proof of timely filing; appeal with submission records if the claim was sent in time, otherwise write off per the contract |
| CO-50 | Non-covered service because it is not deemed a medical necessity by the payer | Review the documentation against the payer's policy; appeal with supporting records or obtain a proper authorization/ABN-type notice for future cases |
| CO-97 | The benefit for this service is included in the payment for another service already adjudicated | Bundling. Verify the code pair against bundling rules; if the services were genuinely distinct, resubmit with the appropriate modifier and documentation |
| CO-109 | The claim is not covered by this payer/contractor | The claim went to the wrong payer. Identify the correct carrier or plan and rebill it there |
| CO-167 | The diagnosis is not covered | Review the diagnosis coding for accuracy; if a covered, documented diagnosis supports the service, submit a corrected claim |
| CO-197 | Precertification, authorization or notification is absent | Check whether an authorization exists under another reference; appeal with clinical records if permitted, and fix the front-end authorization step |
| CO-204 | The service, equipment or drug is not covered under the patient's current benefit plan | Confirm the benefit exclusion; bill a secondary payer or the patient where the plan and law allow, and verify benefits before future visits |
| PR-1 | Deductible amount | No denial to fight — transfer the balance to the patient statement |
| PR-2 | Coinsurance amount | Transfer to the patient, or bill the secondary/supplemental plan first if one exists |
| PR-3 | Co-payment amount | Collect from the patient; ideally verify and collect copays at the time of service |
Two habits make this table more useful. First, sort your own remittances by CARC for a quarter: most practices find that three or four codes produce the majority of their adjustments, and those are the workflows to fix. Second, keep our denial code lookup tool open while you work remittances — it turns a code on a remittance into a plain-English meaning and next step in seconds.
RARCs: The Second Half of the Message
If the CARC is the headline, the RARC is the paragraph underneath. RARCs are supplemental, so payers use them to say the thing the reason code cannot: which specific document was missing, which line item is affected, what form should have been used, or that the information provided did not match what the payer has on file.
They matter most alongside the generic CARCs. CO-16, "lacks information," is unactionable on its own — it is the paired RARC that tells you whether the gap was a missing attachment, an incomplete field, an absent referring provider or something else entirely. Appeals and corrected claims written to the RARC's specific point succeed more often than generic resubmissions, because they answer the exact objection the payer recorded. When you train staff to read remittances, train the pair, not the code.
Turning Codes Into a Workflow
Codes are only useful if they change what happens next. A disciplined denial workflow routes by group code and CARC: PR balances go straight to patient billing or the secondary payer; correctable CO codes go to corrected claims; medical-necessity and authorization denials go to appeal with documentation; and every recurring code gets traced back to the step that produced it — eligibility, authorization, coding or charge entry — so the denial stops repeating. That root-cause loop is how denial volume actually falls: not by working each remittance harder, but by letting the codes show you which front-end step to fix. It is the working method behind our denial management service, and it is why practices that adopt it see denials drop instead of just moving faster.
Related pages
- Denial Code Lookup: CARC Meanings, Causes and Fixes
- Denial Management and Appeals | Medical Billing Services
- Telehealth Medical Billing Guide
Frequently asked questions
What is the difference between a CARC and a RARC?
A CARC is the primary reason code for an adjustment — the main explanation of why a claim or line was denied, reduced or applied elsewhere. A RARC is a supplemental remark code that adds specific detail to the CARC, such as exactly what information was missing. A RARC never stands alone; it always accompanies a CARC, and reading the pair together tells you both the reason and the remedy.
Can a CO adjustment ever be billed to the patient?
Generally no. A CO group code marks the amount as a contractual obligation of the provider under the payer agreement — a write-off, not a patient balance. Billing the patient for CO amounts typically violates the provider contract. Amounts the patient does owe arrive under the PR group code instead, such as PR-1 deductible or PR-2 coinsurance.
Which CARC codes should a practice fix first?
Start with whichever codes carry the most dollars and the most volume on your own remittances — in most practices that is a short list led by authorization (CO-197), medical necessity (CO-50), bundling (CO-97) and information-missing (CO-16) adjustments. Each points at a specific front-end step, so fixing the step removes the code from future remittances rather than just clearing the current one.