Medical Billing Denial Codes (CARC + RARC) Complete Guide for 2026

Every denied claim comes with a code. Two codes, actually: a CARC (Claim Adjustment Reason Code) explaining the category of the adjustment, and a RARC (Remittance Advice Remark Code) explaining the specifics. Together they tell you exactly why the payer didn't pay — and exactly what the appeal needs to address.

This guide is the complete reference billing teams use to decode denials fast. Every common code is here, with its meaning, the typical underlying cause, the action you can take, and (where relevant) the appeal angle that gets it overturned.

At the bottom, there's a section showing how AI-generated appeal letters cite specific codes back to the payer with their own medical policy language. If you process more than 20 denials a month, EZAppeal generates a payer-specific appeal in 60 seconds — first one free.

Quick Navigation

• What's the difference between CARC and RARC?


• The 30 most common CARC codes (CO, PR, OA, PI)


• Critical RARC codes to know


• Group codes explained (CO, PR, OA, PI)


• How to appeal a denial — step by step


• FAQ

What's the difference between CARC and RARC? {#carc-vs-rarc}

CARC = Claim Adjustment Reason Code. Numeric. Explains why a payer adjusted the payment. Maintained by WPC (Washington Publishing Company) and updated quarterly.

RARC = Remittance Advice Remark Code. Alphanumeric (often starts with M, MA, N). Provides additional context about the adjustment. Used in conjunction with a CARC.

A single denial line item can carry one CARC + one or more RARCs. Example:

• CARC 50 — "Non-covered services because this is not deemed a 'medical necessity' by the payer."


• RARC N115 — "This decision was based on a Local Coverage Determination (LCD)."

That's a Medicare LCD-driven medical necessity denial. You appeal it differently than a private commercial "not medically necessary" denial.

Group Codes Explained (CO, PR, OA, PI) {#group-codes}

Every CARC is paired with a 2-letter group code that tells you who is responsible for the adjustment.

| Group code | Meaning | Patient owes? |
|---|---|---|
| CO | Contractual Obligation — provider absorbs the adjustment per contract | No |
| PR | Patient Responsibility — patient owes this | Yes |
| OA | Other Adjustments — neither contractual nor patient responsibility | No |
| PI | Payer Initiated — payer's internal adjustment (rare on EOBs) | No |

If you see PR on a denial reason code, the carrier is saying "the patient owes this, not us." That's different from a denial — it's a coverage determination. CO denials are where appeals usually focus, because they're the ones the carrier is keeping.

The 30 Most Common CARC Codes {#carc-codes}

Ranked by frequency in commercial and Medicare claim data.

CARC 50 — Non-covered services (medical necessity)

Plain English: The payer says this service is not medically necessary based on the documentation submitted.

Typical cause: Clinical notes don't demonstrate the medical necessity criteria in the payer's medical policy (e.g., conservative treatment failure for imaging, step therapy not met for a drug).

Action: Pull the payer's published medical policy for the procedure, identify each criterion, and rebut each one with specific clinical evidence from the chart. Cite the policy by name and section number.

Appeal angle: Strong. Medical necessity denials have ~50% overturn rates when properly appealed with payer-specific criteria.

CARC 11 — Diagnosis inconsistent with the procedure

Plain English: The ICD-10 diagnosis on the claim doesn't support the CPT procedure billed.

Typical cause: The procedure requires a specific diagnosis to be covered (e.g., MRI lumbar spine requires a back-pain or radiculopathy ICD, not a diabetes ICD). Either the diagnosis is wrong or the coding is missing a secondary ICD.

Action: Verify the diagnosis. If correct, add or correct the ICD-10 codes on the claim and resubmit (corrected claim, not appeal). If the documentation supports an additional diagnosis that justifies the procedure, document it and resubmit with all relevant ICDs.

CARC 16 — Claim/service lacks information or has submission error

Plain English: Something is missing or wrong on the claim. Check the accompanying RARC for specifics.

Typical cause: Missing modifier, invalid procedure code combination, missing documentation, NPI issue.

Action: Look at the RARC code paired with this CARC — it tells you what's missing. Common pairings: M16 (alert), M51 (missing/incomplete CPT), M119 (missing/incomplete NDC), N115 (LCD-based).

CARC 18 — Duplicate claim/service

Plain English: A claim for this same patient/date/procedure was already submitted.

Typical cause: Re-submitted claim, claim crossed over from another carrier, billing system glitch.

Action: Check submission history. If actually a duplicate — no action. If different service same day, append modifier 76 (repeat procedure same physician), 77 (repeat by another physician), or 59 (distinct procedural service) and resubmit.

CARC 22 — This care may be covered by another payer per coordination of benefits

Plain English: The payer thinks another insurance is primary.

Typical cause: Patient has dual coverage, COB rules unclear, automotive/workers' comp claim that should go through PIP/WC first.

Action: Verify primary payer. Update COB on the patient's file with the carrier. Bill the primary first if not yet billed. If COB is correctly listed as the carrier billed, file an appeal with proof of primary coverage exhaustion.

CARC 24 — Charges are covered under a capitation agreement

Plain English: This service is included in the capitated payment to the PCP.

Typical cause: Specialist billed for service that PCP is contractually responsible for; or capitation contract didn't carve this service out.

Action: Review the capitation contract. If the service is genuinely outside cap, appeal with contract reference. If the carrier's understanding is correct, write off the charge.

CARC 27 — Expenses incurred after coverage terminated

Plain English: The patient was no longer covered on the date of service.

Typical cause: Coverage lapse, employer termination, mid-month enrollment change, retroactive coverage cancellation.

Action: Verify dates of coverage with the carrier directly. If the patient genuinely had coverage on DOS, appeal with proof (insurance card image dated, eligibility verification screenshot from carrier portal). If coverage truly lapsed, bill the patient — though watch for state-specific protections on retroactive cancellation.

CARC 29 — Time limit for filing has expired

Plain English: The claim was submitted past the timely filing window.

Typical cause: Claim submitted late (most carriers: 90-365 days from DOS), corrected claim past corrected-claim window.

Action: If you have proof of timely original submission (original submission date, claim acknowledgment from clearinghouse, electronic claim transaction history), appeal with that documentation. Most timely-filing denials can be overturned if you can prove a prior timely submission.

CARC 45 — Charge exceeds fee schedule/maximum allowable

Plain English: The amount you billed is higher than what the carrier will pay.

Typical cause: Routine — happens on virtually every commercial claim. Provider bills full charge; carrier adjusts down to contracted rate.

Action: Don't appeal this. It's a contractual write-off. The PR portion (if any) is the patient's responsibility per their plan. Appeal only if you believe the contracted rate is wrong (rare and contract-dependent).

CARC 49 — These services are non-covered (preventive)

Plain English: The service the carrier didn't cover is a preventive screening that wasn't billed correctly under preventive coverage.

Typical cause: ACA preventive services billed without modifier 33 or with the wrong diagnosis code (Z00.00 vs disease-state ICD).

Action: If service genuinely was preventive (annual physical, screening colonoscopy, ACA-mandated screening), appeal with modifier 33 added and a preventive ICD-10. Cite ACA preventive-services mandate (45 CFR § 147.130).

CARC 96 — Non-covered charges

Plain English: Generic non-covered. Service is excluded from this plan.

Typical cause: Specific service excluded by plan benefits, experimental procedure, cosmetic exclusion, alternative medicine.

Action: Check the patient's specific plan benefits. Some "non-covered" denials are genuinely excluded; others are misapplied. For state-mandated benefits (PT/OT visit minimums, mental health parity, breast reconstruction post-mastectomy), appeal citing the state mandate.

CARC 97 — Payment included in another procedure (bundling)

Plain English: This procedure is bundled into another service billed the same day.

Typical cause: NCCI (National Correct Coding Initiative) bundling rule. The two CPTs cannot be billed together unless a modifier breaks the edit.

Action: Check NCCI edits for the procedure pair. If a modifier-59 (distinct procedural service) or modifier-25 (significant E/M same day) is appropriate per documentation, append and resubmit. Don't blindly add modifier 59 — it's a known fraud trigger.

CARC 109 — Claim/service not covered by this payer/contractor

Plain English: Wrong payer. This claim should have gone elsewhere.

Typical cause: Sent to commercial when patient is on Medicare/Medicaid; sent to MA plan instead of FFS Medicare; wrong carrier subsidiary.

Action: Identify the correct payer. Resubmit there (not appeal). Watch timely-filing windows.

CARC 119 — Benefit maximum for this time period has been reached

Plain English: Patient hit a cap on this benefit (visit limit, dollar limit).

Typical cause: Annual PT visit limit, mental health session cap (potentially MHPAEA violation), DME maximum.

Action: Verify the cap is legal. For mental health, federal MHPAEA + state parity laws prohibit MH session caps below comparable medical/surgical caps. For state-mandated benefits (PT/OT in many states), the cap may be set above the carrier's claimed limit. Appeal with statute citation.

CARC 167 — This (these) diagnosis(es) is (are) not covered

Plain English: The specific diagnosis is excluded from this plan or this benefit.

Typical cause: Self-inflicted injury exclusion, occupational injury (should go through WC), specific diagnosis category excluded by plan rider.

Action: Verify exclusion. If wrongly applied, appeal. If correctly applied (e.g., genuinely a workers' comp injury), redirect billing.

CARC 197 — Precertification/authorization/notification absent

Plain English: Required prior authorization wasn't obtained.

Typical cause: Provider missed PA requirement, retro auth opportunity, urgent/emergent service that didn't follow PA workflow.

Action: Three-step process. (1) Check if retro authorization is available. (2) If service was emergent/urgent, appeal with documentation showing the urgent nature (no time to get PA). (3) If neither, this is a hard denial — appeal-rate is low, write-off is likely. Future fix: improve front-end PA workflow.

CARC 204 — Non-covered service per benefit plan

Plain English: This service is excluded under the patient's specific benefit plan.

Typical cause: Plan-specific exclusion. Different from CARC 96 in that it's tied to plan rider rather than universal exclusion.

Action: Pull plan benefits. If wrongly applied, appeal. If correctly applied, bill patient (with NOABN/ABN if applicable for Medicare).

CARC 226 — Information requested has not been provided

Plain English: Carrier asked for additional information (medical records, etc.) and didn't get it within their window.

Typical cause: Records request fell through. Common when records request goes to wrong fax, gets lost, or is misrouted internally.

Action: High overturn rate. Resubmit the requested information with an appeal. Document the date/method of submission. Most carriers reopen the claim once records arrive. Always keep submission confirmation.

CARC 234 — This procedure is not paid separately

Plain English: Bundling. Similar to CARC 97 but for procedure-specific bundling rather than NCCI edit.

Action: Check if a modifier breaks the bundling edit appropriately. If it does and documentation supports, append and resubmit.

CARC 256 — Service not payable per managed care contract

Plain English: Your contract with this MA/Medicaid plan doesn't include this service.

Typical cause: New service not yet contracted, contract renegotiation pending.

Action: Check contract scope. If correctly excluded — write off or bill patient (with prior notice). If wrongly excluded — escalate to provider relations, not appeals department.

CARC B7 — Provider not certified/eligible to be paid for this procedure on this date

Plain English: Carrier doesn't recognize this provider as qualified to perform this service on this date.

Typical cause: Credentialing gap, NPI misregistration, scope-of-practice issue (e.g., NP performing physician-only procedure), provider terminated and not yet reinstated.

Action: Check provider credentialing status with the carrier. Most are administrative and resolved by enrollment/credentialing, not appeals.

CARC B15 — Service requires that a qualifying service has been received first

Plain English: Step therapy. Patient must have failed a cheaper/preferred option first.

Typical cause: Drug formulary step therapy, imaging hierarchy (X-ray before MRI for back pain), conservative treatment requirements.

Action: Document failure of the preferred service in the chart. Appeal with documentation. State-specific step-therapy override laws (NY, CA, TX, IL, others) provide additional appeal angles.

CARC PR-1 — Deductible amount

CARC PR-2 — Coinsurance amount
CARC PR-3 — Copayment amount

Plain English: Patient owes this. Not a denial in the appeal sense — just patient cost-share.

Action: Bill the patient.

CARC PR-31 — Patient cannot be identified

Plain English: Member ID and demographics don't match what the carrier has.

Action: Verify member ID, DOB, and patient name with the carrier (eligibility check). Resubmit corrected claim.

CARC PR-49 — Routine examination

Plain English: Routine/preventive service, patient cost-share applies (if any).

Action: Bill patient per their preventive cost-share.

CARC PR-96 — Non-covered charges

Plain English: Non-covered, patient responsibility (rather than provider write-off).

Action: Bill the patient (with prior notice/ABN if applicable).

CARC PR-204 — This service/equipment/drug is not covered

Plain English: Patient owes the full charge — service not covered.

Action: If patient was given an ABN/NOMNC in advance, bill them. If not, you may have to write off depending on payer rules.

Critical RARC Codes to Know {#rarc-codes}

RARCs add detail to CARCs. The most consequential ones for appeals:

M-codes (Medicare-specific)

• M01 — "X-ray not taken within the past 12 months or near enough to the start of treatment." Common on chiropractic and imaging-justified services.


• M16 — "Alert: Please see our web site, mailings, or bulletins for more details concerning this policy." Generic alert.


• M51 — "Missing/incomplete/invalid procedure code(s)."


• M76 — "Missing/incomplete/invalid diagnosis or condition."


• M86 — "Service denied because payment already made for same/similar procedure within set time frame."


• M119 — "Missing/incomplete/invalid NDC." Common for drugs billed under medical benefit.


• MA01 — "Alert: If you do not agree, you may appeal this decision." Just notice that appeal rights exist.


• MA130 — "Your claim contains incomplete and/or invalid information." Companion to CARC 16.

N-codes (general, all payers)

• N56 — "Procedure code billed is not correct/valid for the services billed or date of service."


• N115 — "This decision was based on a Local Coverage Determination (LCD)." Tells you Medicare made decision based on regional LCD. Pull that LCD and rebut criteria.


• N130 — "Consult plan benefit documents/guidelines for information about restrictions for this service."


• N381 — "Alert: Consult our contractual agreement for restrictions/billing/payment information."


• N517 — "Resubmit a new claim, not a corrected claim."


• N657 — "This should be billed with the appropriate code for these services."


• N706 — "Missing documentation."

How to Appeal a Denial — Step by Step {#how-to-appeal}

Every appealable denial follows the same five-step process:

Step 1: Decode the codes

Identify CARC + RARC. Use this guide. The codes tell you exactly what to address.

Step 2: Pull the payer's medical policy (or LCD/NCD for Medicare)

For commercial denials: search for the payer's published medical policy on the procedure. UHC, Aetna, Cigna, BCBS, Humana all publish theirs publicly. For Medicare denials with an LCD-based denial: pull the LCD from CMS Coverage Database.

Step 3: Identify each criterion in the policy

Medical policies usually have 3-7 criteria. List them. Map each one to specific clinical evidence in your chart.

Step 4: Write the appeal letter — cite the policy by section number

Don't write a generic appeal. Write one that quotes the payer's own policy back at them: "Per UHC Medical Policy 2023T0456R Section 3.2, advanced imaging is indicated when conservative treatment has failed for 6+ weeks. Patient completed 8 weeks of physical therapy (see attached PT records dated...)."

Step 5: Submit before the deadline

File within the appeal window (typically 60-180 days). Include the appeal letter, denial letter, clinical documentation, and any payer-required forms. Track submission for follow-up.

Why Manual Appeal Letters Fall Short

The problem with the 5-step process above is that it takes 30-90 minutes per denial when done manually. A billing team handling 200 denials/month spends 100-300 hours of staff time on appeals alone. That's why most denials are written off.

EZAppeal automates the entire process:

• Upload the denial letter — AI extracts the CARC, RARC, payer, procedure


• Upload clinical notes — AI maps evidence to each criterion in the payer's medical policy


• AI generates a payer-specific appeal in 60 seconds, citing the policy by name and section

First appeal is free. No credit card. Try it now →

If you process 100+ denials per month, EZAppeal's per-document pricing ($3 per generated appeal letter) typically saves 50+ hours of billing-team time per month. See our pricing page or read how EZAppeal compares to Authsnap and Counterforce Health.

Related Resources

• How to Appeal a UnitedHealthcare MRI Lumbar Spine Denial


• How to Appeal an Aetna Knee Arthroscopy Denial


• State Insurance Commissioner Complaints Guide


• Fighting Denied Emergency Room Claims


• AI Denial Appeal Generator: Complete Guide


• Best Medical Billing Appeal Software for 2026

FAQ {#faq}