> ## Documentation Index
> Fetch the complete documentation index at: https://docs.rcintell.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Denial codes (CARC & RARC)

> Understanding Claim Adjustment Reason Codes and Remittance Advice Remark Codes

When a payer adjusts or denies a claim, the **835 ERA** (Electronic Remittance Advice) includes standardized codes that explain why. Understanding these codes is the first step toward resolving denials and recovering revenue.

## CARC — Claim Adjustment Reason Codes

CARCs explain **why** a claim line was adjusted. Every adjustment on an 835 includes at least one CARC. These codes are maintained by the X12 organization and used by all payers.

### Group codes

Each CARC is paired with a group code that indicates financial responsibility:

| Group  | Name                   | Meaning                                                   |
| ------ | ---------------------- | --------------------------------------------------------- |
| **CO** | Contractual Obligation | Adjustment per contract — provider cannot bill patient    |
| **PR** | Patient Responsibility | Patient owes this amount (deductible, copay, coinsurance) |
| **OA** | Other Adjustment       | Adjustment not attributable to contract or patient        |
| **PI** | Payer Initiated        | Payer-initiated reduction not related to adjudication     |

### Most common CARCs

| CARC    | Description                                                                         | Common Cause                         | Resolution Strategy                                            |
| ------- | ----------------------------------------------------------------------------------- | ------------------------------------ | -------------------------------------------------------------- |
| **4**   | Procedure code inconsistent with modifier or missing modifier                       | Wrong modifier, missing LT/RT/26/TC  | Correct modifier and resubmit                                  |
| **16**  | Claim/service lacks information needed for adjudication                             | Missing data element on claim        | Identify missing field, resubmit with complete data            |
| **18**  | Duplicate claim/service                                                             | Same claim submitted twice           | Verify original claim status; do not resubmit                  |
| **29**  | Timely filing limit expired                                                         | Claim filed after payer deadline     | Check if exception applies; appeal with proof of timely filing |
| **50**  | Non-covered service (not deemed a medical necessity)                                | Diagnosis doesn't support procedure  | Appeal with medical necessity documentation                    |
| **96**  | Non-covered charge                                                                  | Service excluded from benefit plan   | Verify coverage; appeal or bill patient with ABN               |
| **97**  | Payment adjusted — benefit for this service included in another service             | Bundled into primary procedure       | Review NCCI edits; modifier 59/X{EPSU} if distinct             |
| **197** | Precertification/authorization/notification absent                                  | No prior auth on file                | Obtain retro-auth or appeal with medical records               |
| **204** | This service/equipment/drug is not covered under the patient's current benefit plan | Not a covered benefit                | Verify eligibility; appeal if coverage should apply            |
| **252** | An attachment/other documentation is required to adjudicate                         | Clinical documentation not submitted | Submit required records and reprocess                          |

## RARC — Remittance Advice Remark Codes

RARCs provide **additional context** alongside CARCs. They don't change the adjustment amount — they explain it further.

| RARC      | Description                                 | Paired With |
| --------- | ------------------------------------------- | ----------- |
| **N479**  | Missing prior authorization                 | CARC 197    |
| **N362**  | Missing/incomplete/invalid medical records  | CARC 252    |
| **N657**  | Claim submitted beyond timely filing limit  | CARC 29     |
| **M76**   | Missing incomplete/invalid diagnosis code   | CARC 16     |
| **N432**  | Alert: non-covered service per benefit plan | CARC 96     |
| **MA130** | Claim specific negotiated discount          | CARC 45     |
| **N425**  | Duplicate of a previously processed claim   | CARC 18     |

## How RCI interprets denial codes

The **denial resolution agent** accepts CARC and RARC codes and returns actionable resolution strategies:

```bash theme={null}
curl -X POST https://api-dev.rcintell.com/v1/agents/denial-resolution \
  -H "X-API-Key: kp_test_..." \
  -H "Content-Type: application/json" \
  -d '{
    "query": "Claim denied with CO-97, how do I unbundle?",
    "carc": "97",
    "ccn": "170001"
  }'
```

The agent cross-references the CARC with:

* **NCCI PTP edits** to determine if the code pair is truly bundled
* **L4 payer rules** for the facility's primary payer
* **Modifier applicability** (59, XE, XP, XS, XU) to determine if unbundling is appropriate
* **Appeal deadlines** from the payer's timely filing rules

<Warning>
  CARC/RARC codes are standardized, but payer interpretation varies. A CARC 50 from Medicare (no LCD/NCD support) requires different documentation than a CARC 50 from a commercial payer (plan exclusion). Always check L4 payer context.
</Warning>

## Reading an 835 adjustment

A typical 835 adjustment line looks like:

```
CAS*CO*97*45.00~
```

| Segment | Value                    | Meaning                                     |
| ------- | ------------------------ | ------------------------------------------- |
| `CAS`   | Claim Adjustment Segment | Start of adjustment                         |
| `CO`    | Group code               | Contractual Obligation — provider write-off |
| `97`    | CARC                     | Bundled with another service                |
| `45.00` | Amount                   | \$45.00 adjusted                            |

The corresponding RARC (in the `RMK` segment) provides additional detail on why the bundling occurred.