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Understanding Medical Claim Codes
Understanding Medical Claim Codes

Learn how to interpret CARCs, RARCs, and Group Codes

Aubree Dorr avatar
Written by Aubree Dorr
Updated over a week ago

Once a claim is fully processed by a payer, any claim adjustments made to the final payment of the claim by the payer will be described through the use of CARCs, RARCs, and group codes. These codes are often available on an electronic remittance advice (ERA) or explanation of benefits (EOB). These codes at times are referred to as denial codes however, because an adjustment may represent denials, zero payment, partial payment, reduced payment, additional payment, and supplemental payment you may see these codes even on paid claims. Some payers even publish their own specific codes outside of the industry standard sets described below.

If you have authorized DocStation to receive ERAs on your behalf you will see these codes, when applicable, on your adjudicated claims.

Claim Adjustment Reason Codes (CARCs)

Claim adjustment reason codes are used by the insurance payer to describe why a claim or service line was paid differently than it was billed. If there is no adjustment made to a service line or claim, then there is no CARC. The codes were developed to be used across all payers and are generic in nature.

The complete list of the industry standard CARC codes can be found at the website.

Remittance Advice Remark Codes (RARCs)

Remittance advice remark codes are used by the insurance payer to provide additional information related to an adjustment or to communicate information related to remittance processing. Some CARCs are so generic they need to be accompanied by a RARC to further explain why an adjustment was made to a claim.

RARCs can be broken down into two categories: supplemental and informational. Supplemental RARCs are those that provide additional information related to an adjustment described by a CARC.

Informational RARCs are used to communicate information related to general remittance processing and are not related to a specific claim adjustment or CARC. Informational RARCs are all prefaced with the word "Alert".

The complete list of the industry standard RARC codes can be found at the website.

Group Codes

Group codes are used to identify financial responsibility for the unpaid portion of the claim balance. There are different types of group codes as described below. Group codes are always used in combination with a CARC.

  • PR: Patient Responsibility

  • PI: Payer Initiated Reduction

  • CO: Contractual Obligation

  • OA: Other Adjustment

PR: used when the adjustment amount may be attributed to the patient. This group code is typically used for deductibles, copays and coinsurance adjustments.

PI: used by the payer when the adjustment is not the responsibility of the patient/insured and there is no supporting contract between the provider and payer. Note: this code is not used by Medicare.

CO: used when an adjustment is a result of a contractual agreement between the payer and payee, or due to a regulatory requirement.

OA: used when no other group code applies to the adjustment.

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