Start with the remittance advice
After a payer processes a claim, the remittance advice communicates adjudication and payment information. Electronic remittance advice (ERA) uses standardized adjustment information so billing systems can associate the payer decision with a claim or service line.
Three pieces you may see together
| Element | What it tells you |
|---|---|
| Claim Adjustment Group Code | Categorizes responsibility for the adjustment, such as contractual obligation or patient responsibility. |
| CARC | Provides the overall reason a claim or service line was paid differently than billed. |
| RARC | Adds more specific explanation to a CARC or communicates additional remittance information. |
Read the full message
A CARC alone may not tell the entire story. Some CARCs require an accompanying remark code, and payer portals may also provide additional detail. Review the group code, reason code, remark code, adjustment amount and affected claim line together.
Example
If the remittance indicates that a claim or service lacks required information, do not guess what is missing. Read the accompanying remark information and payer message, identify the exact data or documentation issue, then verify the source before correcting the claim.
Quick knowledge check
What does a CARC explain?
The overall reason a claim or service line was paid differently than billed.
What does a RARC do?
It can provide additional detail about an adjustment or other remittance information.
Should you read only the numeric reason code?
No. Read the group code, CARC, RARC, amounts and payer-specific detail together.
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