CARC and RARC Codes
The following information is for RARC codes & CARC codes meaning for medical billing.
What are CARC Codes?
CARC Codes are ‘Claim adjustment reason codes’ (abbreviation: CARC). CARC codes communicate an adjustment, meaning that they must communicate why a claim or service line was paid differently than it was billed.
If there is no adjustment to a claim/line, then there is no adjustment reason code.
Carc Code Example 1
CO 16: Claim/service lacks information which is needed for adjudication. At least one Remark Code must be provided (may be comprised of either the NCPDP Reject Reason Code, or Remittance Advice Remark Code that is not an ALERT.)
Carc Code Example 2
CO 45: Charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement. (Use Group Codes PR or CO depending upon liability).
What are RARC Codes?
RARC codes are Remittance Advice Remark Codes (abbreviation RARC). RARC codes are used to convey information about remittance processing or to provide a supplemental explanation for an adjustment already described by a Claim Adjustment Reason Code.
Each Remittance Advice Remark Code identifies a specific message as shown in the Remittance Advice Remark Code List.
RARC Code Example 1
M25: The information furnished does not substantiate the need for this level of service.
If you believe the service should have been fully covered as billed, or if you did not know and could not reasonably have been expected to know that we would not pay for this level of service, or if you notified the patient in writing in advance that we would not pay for this level of service and he/she agreed in writing to pay, ask us to review your claim within 120 days of the date of this notice.
If you do not request an appeal, we will, upon application from the patient, reimburse him/her for the amount you have collected from him/her in excess of any deductible and coinsurance amounts.
We will recover the reimbursement from you as an overpayment.
RARC Code Example 2
M80: Not covered when performed during the same session / date as a previously processed service for the patient.