Medical Billing Denial Codes: CARC and RARC Codes Explained

What medical claim denial codes tell you

When a payer denies or reduces a claim, the remittance explains why with standardized medical claim denial codes. This denial codes list covers the group codes, the claim adjustment reason codes (CARCs) and the remittance advice remark codes (RARCs) that billing teams see most, with the official X12 descriptor and a one-line fix for each.

Both code lists are maintained by X12 and appear on the electronic remittance advice (the 835 transaction) and on paper explanations of benefits. X12 updates the lists several times a year, adding, revising and deactivating codes, so check the current list when a code looks unfamiliar.

Reading these codes correctly decides what happens next. Some adjustments are routine contract write-offs, some belong on the patient statement, and some are true denials that need a corrected claim or an appeal before a filing or appeal deadline passes.

How CARC and RARC codes work together

Each adjustment on a remittance is reported as a group code plus a reason code, sometimes with one or more remark codes. A line that reads CO-197 with a remark code attached has three parts, and each part answers a different question. CARC codes explain the reason for an adjustment; RARC codes add the detail.

• Group code (two letters): who is financially responsible for the adjusted amount.
• CARC (a number, such as 16 or 197): why the payer paid differently than billed.
• RARC (a code starting with M, MA or N): extra detail, such as which data element is missing or which document the payer wants.

The four group codes: CO, PR, OA and PI

Group code	X12 name	What it means for the practice
CO	Contractual Obligation	The provider absorbs the amount under a contract or regulation. In most cases it cannot be billed to the patient.
PR	Patient Responsibility	The amount may be billed to the patient, such as a deductible, coinsurance or copay.
OA	Other Adjustment	Used when neither CO nor PR applies, for example exact duplicates or the effect of a prior payer's payment.
PI	Payor Initiated Reduction	A reduction applied by the payer that is not assigned to the patient. Read the reason code to decide whether to dispute it.

The group code matters as much as the number. A deductible reported as PR-1 goes on the patient statement, while the same dollars reported under CO usually cannot be collected from the patient at all. Some CARCs are tied to a group by X12 itself: code 23 is to be used only with OA, and code 45 only with PR or CO depending on liability.

Common codes at a glance

The table below uses the official X12 descriptors, shortened only where X12 adds usage notes such as 'Refer to the 835 Healthcare Policy Identification Segment'. Payers can apply the same code for slightly different reasons, so always read the remark codes and the payer's own policy before acting.

Code	X12 descriptor	One-line fix
CO-4	The procedure code is inconsistent with the modifier used.	Check the payer's modifier rules for that code and send a corrected claim.
CO-11	The diagnosis is inconsistent with the procedure.	Recheck the ICD-10-CM code against the note; correct a coding error or appeal with records.
CO-16	Claim/service lacks information or has submission/billing error(s).	Fix the field the remark code names and resubmit; usually not an appeal.
CO-18 (X12: use with OA)	Exact duplicate claim/service.	Check claim status; send changes as a corrected or replacement claim, not a new one.
CO-22	This care may be covered by another payer per coordination of benefits.	Confirm coordination of benefits and bill the primary payer first.
CO-27	Expenses incurred after coverage terminated.	Re-verify eligibility for the date of service and bill the active coverage.
CO-29	The time limit for filing has expired.	Appeal only with proof of timely submission, such as a clearinghouse acceptance report.
CO-45	Charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement.	Post the write-off, then compare the allowed amount with your contract.
CO-50	These are non-covered services because this is not deemed a 'medical necessity' by the payer.	Review the coverage policy and appeal with records that show necessity.
CO-96	Non-covered charge(s). At least one Remark Code must be provided.	Read the remark code to see why the service is excluded before billing anyone.
CO-97	The benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated.	Check bundling edits; use a distinct-service modifier only when documentation supports it.
CO-109	Claim/service not covered by this payer/contractor. You must send the claim/service to the correct payer/contractor.	Find the correct payer or carve-out vendor and submit there.
CO-151	Payment adjusted because the payer deems the information submitted does not support this many/frequency of services.	Check units and frequency limits; appeal with notes if the volume was necessary.
CO-167	This (these) diagnosis(es) is (are) not covered.	Confirm diagnosis specificity and sequencing against the payer policy.
CO-197	Precertification/authorization/notification/pre-treatment absent.	Match the claim to a valid authorization, or request retro authorization or appeal.
OA-23	The impact of prior payer(s) adjudication including payments and/or adjustments. (Use only with Group Code OA)	Usually informational on secondary claims; reconcile against the primary payment.
PR-1	Deductible Amount	Bill the patient, or the secondary plan if one applies.
PR-2	Coinsurance Amount	Bill the secondary plan, then the patient for what remains.
PR-3	Co-payment Amount	Collect at check-in where possible.
PR-204	This service/equipment/drug is not covered under the patient's current benefit plan	Confirm the exclusion, then bill the patient only if plan rules and any required notice allow it.
N290 (RARC)	Missing/incomplete/invalid rendering provider primary identifier.	Add the rendering provider's NPI and confirm that provider is enrolled with the payer.

Five of these codes have their own step-by-step guides: the CO-16 missing information guide, CO-97 bundling denials, the CO-197 prior authorization guide, CO-50 medical necessity denials and CO-4 modifier denials. The rest are covered below.

Reason codes not covered in a separate guide

CO-11 denial code: diagnosis does not support the procedure

The CO-11 denial code means the payer's edits do not accept the diagnosis as a reason for the procedure billed. Common causes are a diagnosis pointer on the claim line that points to the wrong code, a nonspecific code where the policy lists specific ones, or a simple keying error. Fix the pointer or the code and send a corrected claim. If the coding matches the note and the policy, appeal with the record and the policy section.

CO-18 duplicate claim denial

Billers often call it the CO-18 duplicate claim denial, but X12 says code 18 is used only with group code OA, except where state workers' compensation regulations require CO. It fires when the payer already has the same patient, date, code and provider. Before doing anything, check claim status: the original may be paid or pending. If you meant to change a processed claim, send a corrected claim with the right frequency code instead of a new original.

CO-22 denial code: another payer may be primary

A CO-22 denial code means the payer believes another plan should pay first under coordination of benefits. Ask the patient about other coverage, including a spouse's plan, Medicare or an auto or workers' compensation claim, and ask the payer which plan it has on file. Many payers will not reprocess until the patient updates the coordination of benefits record, so prompt the patient to call.

CO-27 denial code: coverage ended before the visit

The CO-27 denial code says the expenses were incurred after coverage terminated. Run a new eligibility check for the date of service, ask the patient for current insurance, and bill the plan that was active. Retroactive terminations happen, so keep the original eligibility response as evidence if you appeal.

CO-29 timely filing denial

A CO-29 timely filing denial means the claim reached the payer after its filing limit. Medicare fee-for-service generally allows one calendar year from the date of service under 42 CFR 424.44; commercial and Medicaid limits are set by contract and plan and are often much shorter. An appeal works only with proof the claim was submitted on time, such as a clearinghouse acceptance report or payer acknowledgment. Our timely filing limits guide explains how to track each payer's window.

CO-45 denial code: the contractual write-off

The CO-45 denial code is not really a denial. It reports the difference between your charge and the allowed amount under the fee schedule or contract, and it is normally written off. X12 limits code 45 to group PR or CO depending on liability. Review it anyway: compare the allowed amount with your contracted rate, because an incorrect fee schedule load shows up here as an underpayment that looks routine.

CO-96 denial code: non-covered charge

The CO-96 denial code reports a non-covered charge, and X12 requires at least one remark code with it. The remark code is what tells you whether the plan excludes the service, the provider type is not covered, or a benefit limit applies. Do not move the balance to the patient automatically; check whether the plan and any advance notice rules allow it.

CO-109 denial code: wrong payer or contractor

The CO-109 denial code tells you to send the claim to the correct payer or contractor. In behavioral health it often means mental health benefits are carved out to a separate vendor; in Medicare it can mean the claim went to the wrong jurisdiction or should go to a DME contractor. Identify the right payer ID and submit there. The original denial does not extend the other payer's filing limit, so act quickly.

CO-151 denial code: frequency or units not supported

A CO-151 denial code means the payer does not think the information supports this many services or this frequency. It is common for therapy, injections and repeat testing. Check the units billed against the note and the payer's frequency limits. If the extra visits or units were necessary, appeal with documentation that shows why.

CO-167 denial code: diagnosis not covered

The CO-167 denial code says the diagnosis reported is not covered. First confirm the claim lists the most specific diagnosis supported by the note and that the primary diagnosis is sequenced correctly. If the plan simply excludes the condition, review the policy and decide whether the patient can be billed.

OA-23 denial code: prior payer adjudication

An OA-23 denial code appears on secondary and tertiary remittances. It reports the effect of the primary payer's payment and adjustments, so it is usually an informational adjustment rather than a denial. Reconcile the amounts against the primary remittance, and if the secondary payer used the wrong primary figures, send a corrected claim with the primary payment details.

PR-1 deductible denial

A PR-1 deductible denial is not a denial in the usual sense. The allowed amount was applied to the patient's deductible, so the claim processed correctly and the balance is the patient's. Bill a secondary plan first if there is one, then the patient. Checking the remaining deductible at eligibility helps set expectations before the visit.

PR-2 coinsurance and PR-3 copay

PR-2 coinsurance is the patient's percentage share of the allowed amount, and PR-3 copay is a flat amount per visit. Both are patient responsibility. Copays are best collected at check-in, and coinsurance can be estimated from the eligibility response and billed after the remittance posts.

PR-204 denial code: not covered under the patient's plan

The PR-204 denial code means the service, equipment or drug is not covered under the patient's current benefit plan, and the payer has assigned the amount to the patient. Verify the exclusion with the payer before billing, and check any contract terms that limit balance billing. For Medicare and many commercial plans, collecting from the patient may depend on a signed advance notice or financial agreement obtained before the service.

N290 remark code: rendering provider identifier

The N290 remark code means the rendering provider's primary identifier is missing, incomplete or invalid, and it often appears with CO-16. Make sure the rendering provider's individual NPI is on the claim, not only the group NPI, and that the provider is enrolled and linked to the group with that payer. Some payers deny these lines until the rendering NPI is on file with them.

Remark codes that point to the fix

Remark codes rarely stand alone. They narrow down a CARC so the biller knows exactly what to correct. A few examples from the X12 list show how specific they can be.

RARC	X12 descriptor	How to use it
M127	Missing patient medical record for this service.	Send the requested records through the payer's attachment or appeal channel.
M51	Missing/incomplete/invalid procedure code(s).	Review the CPT or HCPCS code on the line and correct it.
MA130	Your claim contains incomplete and/or invalid information, and no appeal rights are afforded because the claim is unprocessable.	Correct the claim and submit it again. An appeal is not the route.
N20	Service not payable with other service rendered on the same date.	Check bundling edits for the same-day services and the documentation for a separate service.
N290	Missing/incomplete/invalid rendering provider primary identifier.	Add or correct the rendering NPI and confirm enrollment.

When the remark code and the reason code seem to disagree, call the payer or check the portal before changing the claim. Guessing often turns one denial into two.

How to appeal a denied claim

Start by sorting the denial. Front-end errors such as a wrong member ID or missing modifier usually need a corrected claim, not an appeal. Disputes about coverage, medical necessity, bundling or authorization usually need a formal appeal with supporting records.

1. Read the group code, CARC and every RARC, and note the payer's appeal deadline from the remittance or provider manual.
2. Pull the clinical note, authorization record, eligibility response and any payer policy that applies.
3. Write a short appeal letter that names the claim, date of service, codes billed and the specific reason the denial is wrong.
4. Attach only the documents that prove the point, and use the payer's required form or portal.
5. Track the appeal with a follow-up date, and escalate to the next level if it is upheld.

Commercial payers usually offer a reconsideration or first-level appeal, sometimes a second level, and in some cases external review. Levels, forms and deadlines differ by payer and plan, so the provider manual is the controlling document.

Medicare's five levels of appeal

Original Medicare uses a five-level process for Part A and Part B claims, described by CMS. The deadlines below are measured from receipt of the prior decision.

Level	Who decides	Time to file
1. Redetermination	The Medicare Administrative Contractor (MAC)	120 days
2. Reconsideration	A Qualified Independent Contractor (QIC)	180 days
3. Hearing	Office of Medicare Hearings and Appeals (OMHA)	60 days
4. Review	Medicare Appeals Council	60 days
5. Judicial review	Federal district court	60 days

Levels 3 and 5 also require a minimum amount in controversy, which CMS updates each year. Simple clerical errors can often be handled through a reopening with the MAC instead of a formal appeal.

Claim denial codes by specialty

The same code can mean different things across specialties. In behavioral health, a CO-197 authorization denial often traces back to a session count that outran the authorization, and CO-109 often means the plan carves mental health out to a separate vendor. Our guide to psychotherapy claim denials and their fixes walks through those patterns.

Therapy practices see more CO-151 frequency denials and CO-97 bundling edits, surgical specialties see more modifier-related CO-4 denials, and groups that add new clinicians see N290 when enrollment lags behind the start date. Tracking denials by code and payer shows which pattern belongs to your practice.

Turning codes into prevention

Every posted denial should be logged with its group code, CARC, RARC, payer and the root cause your team identified. After a few months, the log shows where the process breaks: registration, eligibility, authorization, coding or claim submission.

• CO-16, CO-22, CO-27, CO-109 and N290 usually point to intake, eligibility and enrollment gaps.
• CO-197 and CO-151 point to authorization and visit tracking.
• CO-4, CO-11, CO-97 and CO-167 point to coding and documentation.
• CO-29 points to claim lag or slow follow-up on rejections.
• CO-45 and PR adjustments need review for underpayments and patient balances, not appeals.

Fixing the upstream step removes the denial from future claims, which is cheaper than appealing the same problem every month.

Getting help with denials

Fastora's certified medical billing and coding professionals work denials by code and root cause inside your existing EHR or practice management system. Learn how our denial management team handles corrections and appeals, or start with a free claims audit to see which codes appear most often on your remittances.

If a claim never reached adjudication, it was rejected rather than denied; claim rejection vs denial explains which route each outcome needs.

Worked examples by code: CO-16 missing information, CO-4 modifier problems and CO-97 bundling denials show how the same code family is handled differently.

Checklist

Print checklist

• Read group code, CARC and all RARCs before acting
• Decide: corrected claim, appeal, patient bill or write-off
• Check the appeal or resubmission deadline
• Gather notes, authorization and eligibility records
• Log the denial with its root cause
• Set a follow-up date for every appeal

Frequently asked questions