CARC and RARC codes in dental billing
CARCs, claim adjustment reason codes, explain why a payer paid a claim line differently from what was billed. RARCs, remittance advice remark codes, add detail or say what is missing. Every CARC comes with a group code, CO, PR, OA or PI, that says who carries the adjustment.
Also calledClaim adjustment reason codesRemittance advice remark codesGroup codesDenial codes
By Dr. Maya Arnaout, DDS, VP of RevenuePublished 4 min read
What is a CARC?
A CARC is a short number that explains an adjustment: the difference between what the practice billed for a procedure and what the payer paid. The list is a national standard published by X12, so the same number means the same thing from every payer.
On an ERA, each adjustment carries a group code, a reason code and an amount. On a paper EOB the same codes are usually printed beside each line, sometimes with the payer’s own wording.
One adjustment line on an ERA
CAS*CO*45*30.00~
On a paper EOB the same line reads CO-45 $30.00
- COGroup code
- Contractual obligation: the practice carries the amount.
- 45Reason code (CARC)
- The charge exceeds the fee schedule.
- 30.00Amount
- Written off. In network, not billed to the patient.
What do the group codes CO, PR, OA and PI mean?
The group code says who carries the adjustment. Read it first: the same reason code can mean a write-off under one group code and a patient balance under another.
| Group code | Stands for | What it means for the practice |
|---|---|---|
CO | Contractual obligation | The practice absorbs it under its contract or the payer’s rules. It cannot be billed to the patient. |
PR | Patient responsibility | The patient owes it: a deductible, coinsurance, a copay or a service the plan does not cover. |
OA | Other adjustment | Neither of the above, for example the balance left after another payer paid first. |
PI | Payer initiated reduction | The payer reduced the line and holds that the patient is not responsible. Review it before writing it off. |
Which CARC codes does a dental office see often?
These come up on dental remittances every week. The group code shown is the usual one; always read the group code on your own remittance.
| Code | Meaning | What to do |
|---|---|---|
CO-45 | Charge exceeds the fee schedule or maximum allowable amount | Post it as the contractual write-off. In network, the patient is not billed for it. |
PR-1 | Deductible | Not a denial. Post it as patient responsibility and bill the patient. |
PR-2 | Coinsurance | Not a denial. It is the patient’s percentage share; post it to the patient. |
PR-3 | Copay | Not a denial. Post it to the patient, or apply the copay collected at the visit. |
PR-119 | Benefit maximum for the period has been reached | The annual maximum is used up. Bill the patient under their plan. |
CO-97 | Bundled: the benefit is included in the payment for another procedure | Check the bundling. Appeal if the procedures are separately billable; otherwise write it off. |
CO-29 | The time limit for filing has expired | Appeal only with proof the claim went out on time; otherwise write it off and fix the delay. |
CO-16 | The claim lacks information or has a billing error | A remark code says what is missing. Add it, such as an x-ray, narrative or tooth number, and resubmit. |
CO-18 | Exact duplicate claim | Check that the original was paid. Post nothing new. |
What is a RARC, and how does it work with a CARC?
A RARC adds what a CARC cannot say on its own. RARCs start with M, MA or N, and the list is maintained by CMS. A broad CARC such as 16, “claim lacks information”, is paired with a RARC that names the missing item, so the office knows exactly what to send.
How should an office act on each code?
Sort every adjusted line into one of four piles:
- Post and move on: contractual write-offs (
CO-45) and patient responsibility (PR-1,PR-2,PR-3), which start patient billing. - Fix and resubmit: missing information or billing errors (
CO-16with its remark code). - Appeal: bundling you disagree with (
CO-97), timely filing you can prove (CO-29) and payer reductions (PI) that look wrong. - Do not post: duplicates (
CO-18) and anything already paid.
Track denials by code and by payer. A code that keeps coming back from one payer usually points to a cause you can fix upstream.
How ScoutIQ handles it
ScoutIQ reads the CARC and RARC codes on every ERA and paper EOB. Contractual write-offs and patient responsibility post to your PMS on their own; denials and short pays go to their own queue with the payer’s reason and the days left to appeal, and your team files the appeal.
Insurance Billing Automation
ERAs and EOBs read; EFT, check and card payments reconciled.
See Insurance Billing Automation