CARC Codes Explained: What Every Biller Needs to Know

What Are CARC Codes?

Claim Adjustment Reason Codes (CARCs) are standardized codes used by payers to explain why a claim was adjusted — meaning why the amount paid differs from the amount billed. Every ERA and EOB will include at least one CARC for every adjustment.

CARCs are maintained by the Washington Publishing Company (WPC) under the direction of CMS and WEDI. There are currently over 250 active CARC codes.

The Three Adjustment Group Codes

Every CARC appears alongside a group code that tells you who is financially responsible for the balance:

CO paired with a CARC = contractual write-off. You cannot bill the patient. PR paired with a CARC = patient owes this amount.

The 20 Most Important CARC Codes

Claim-Level Denials

• CO-4 — Modifier inconsistency.
• CO-11 — Diagnosis inconsistent with the procedure.
• CO-16 — Claim lacks information needed for adjudication.
• CO-18 — Duplicate claim or service.
• CO-22 — Care may be covered by another payer (COB issue).
• CO-29 — Timely filing — claim received after the filing deadline.
• CO-45 — Charge exceeds fee schedule. Routine contractual adjustment.
• CO-50 — Not medically necessary per payer policy.
• CO-97 — Service included in payment for another service.
• CO-109 — Claim not covered by this payer — re-bill correct payer.

Patient Responsibility

• PR-1 — Deductible amount.
• PR-2 — Coinsurance amount.
• PR-3 — Copayment amount.
• PR-204 — Service not covered under the patient's current benefit plan.

Key Takeaway

CARC codes are the single most important diagnostic tool in revenue cycle management. Build a quick-reference list of the 15-20 CARCs that appear most frequently in your practice, and you will resolve claims faster and more accurately.