CARC Claim Adjustment Reason Code
A standard code on a remittance (835/ERA) that explains why a claim or service line was paid differently than billed.
Claim Adjustment Reason Codes (CARCs) are a standard code set maintained by X12 and used on electronic remittance advice (the 835 transaction) and paper remittances. They tell the provider why a payer adjusted payment — for example, because a service is not covered, a deductible applies, or information is missing.
How CARCs are used
A CARC is always paired with a group code:
- CO — contractual obligation (the provider generally may not bill the patient)
- PR — patient responsibility (deductible, coinsurance, copay, non-covered with notice)
- OA — other adjustment
- PI — payer-initiated reduction
A RARC (Remittance Advice Remark Code) often adds detail. Reading the group code, CARC and RARC together tells the biller what to do next — correct and resubmit, appeal, bill the patient, or write off.
Why CARCs matter
Tracking denials by CARC reveals root causes, such as eligibility, authorization, coding or medical necessity, so they can be fixed upstream. The code lists are updated periodically; use the current list from X12.