Denial Codes Explained (CARC/RARC)
In an 835 ERA, adjustments and denials are commonly represented by CARC/RARC codes (often via CAS segments). These codes explain why money was reduced or denied and what action is needed.
How to think about denial codes
- CARC = Claim Adjustment Reason Code (why payment changed)
- RARC = Remittance Advice Remark Code (extra detail / instruction)
- Group codes (e.g., CO/PR/OA) tell who is responsible
Typical workflows
Patient responsibility
Often indicated by group PR. Route to patient billing or collect copay/coinsurance.
Contractual adjustment
Often group CO. Validate fee schedule and payer contract terms.
Other adjustment
Often group OA. Investigate payer processing or missing information.
MedClaimsIQ can summarize adjustment reasons for each claim so you can build a denial work queue and trend reports.