What Are CARC Codes?
Claim Adjustment Reason Codes (CARC) are standardized codes used by payers on Electronic Remittance Advice (ERA) documents to explain why a claim was adjusted, reduced, or denied. Understanding these codes is critical for ABA billing teams to resolve denials quickly and maximize collections.
Most Common ABA CARC Codes
CARC 4 — Authorization Required
Meaning: The service requires prior authorization, and none was on file.
Action: Obtain the correct authorization number and resubmit the claim with the auth number in Box 23 of the CMS-1500.
Prevention: Verify authorization before every service date; never provide ABA without confirmed auth.
CARC 29 — Timely Filing Limit Exceeded
Meaning: The claim was submitted after the payer's timely filing deadline (typically 90–365 days from date of service).
Action: Appeal immediately with proof of timely filing — clearinghouse acceptance report, previous claim submission confirmation, or any documentation showing original submission was within the deadline.
Prevention: Submit claims within 30 days of service; monitor claims older than 60 days.
CARC 45 — Charge Exceeds Fee Schedule
Meaning: Your billed charge exceeds the contracted fee schedule maximum. This is a contractual write-off — no appeal needed.
Action: Write off the difference; bill patient only their copay/deductible/coinsurance portion.
CARC 50 — Not Medically Necessary
Meaning: The payer has determined the service does not meet medical necessity criteria.
Action: Appeal with clinical documentation including the behavior intervention plan, progress notes, diagnostic records, and any clinical guidelines supporting medical necessity for ABA at the authorized level.
CARC 59 — Processed Based on Multiple Surgery Rules
Meaning: The service was bundled with another procedure under NCCI (National Correct Coding Initiative) edits.
Action: Review which codes were bundled; add modifier 59 or XE/XP/XS/XU if the services were genuinely separate and distinct.
CARC 96 — Non-Covered Charge
Meaning: The service is not a covered benefit under this patient's plan.
Action: Inform the family; bill patient if allowed by contract. Consider whether a different diagnosis or code may qualify under a different benefit category.
CARC 97 — Payment Adjusted Because Procedure/Service Was Included in a Previously Adjudicated Service
Meaning: Similar to CARC 59 — the billed service is considered bundled into a payment already made.
Action: Review the remittance to understand which service was "included in." Add modifier 59 if appropriate.
CARC 197 — Precertification/Authorization/Notification Absent
Meaning: The specific service required precertification and none was obtained.
Action: Very similar to CARC 4. Obtain retroactive authorization if available from the payer, then resubmit with auth number.
Group Codes
CARC codes always appear with a group code that indicates the adjustment category:
- CO (Contractual Obligation) — No patient billing; write off
- PR (Patient Responsibility) — Bill patient
- PI (Payer Initiated) — Payer adjustment; review for appeal opportunity
- OA (Other Adjustment) — Review for cause