What does CARC 204 mean?

CARC 204 means the service, equipment, or drug is not covered under the patient's current benefit plan. The denial always ties back to a specific plan document such as the Summary of Benefits or Evidence of Coverage.

How is CARC 204 different from CARC 96?

CARC 96 is the general non-covered charge code and can reflect statutory exclusions, National Coverage Determinations, or plan exclusions. CARC 204 is specifically plan-document driven: the payer read the member's specific plan and concluded the service is excluded. CARC 204 typically stands alone without a paired RARC, and it always points you at a plan document.

Can I appeal a CARC 204 denial?

Yes, when the plan document actually covers the service, when the payer misclassified the CPT code, when the payer adjudicated against the wrong plan year, or when coverage criteria are met and were overlooked. If the plan document clearly and specifically excludes the service, the appeal will fail.

Can I bill the patient for a CARC 204 denial?

Only if the group code is PR (Patient Responsibility) and your payer contract permits billing for excluded services. If the group code is CO (Contractual Obligation), you are contractually barred from billing the patient and must write off the balance or appeal.

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Denial Brief

CARC 204: Not covered under the patient's current benefit plan. What it means, and how to appeal it.

Last updated: August 2026

CARC 204 tells you the payer read the patient's specific plan and concluded the service is not a covered benefit. That is different from CARC 96, which can cover statutory exclusions, National Coverage Determinations, or plan-rule denials. CARC 204 always points you at a plan document. The document is where the answer lives, and the difference between a legitimate write-off and a recoverable payer error usually comes down to whether anyone bothered to pull it.

By Mindy Corbett, CSPO, CPC, CPB, CPPM · 6 min read

Rendered live from the EDI Code Intelligence Lab data set

CARC 204

CLAIM ADJUSTMENT REASON CODE

This service/equipment/drug is not covered under the patient's current benefit plan.

Medium Risk

What This Means

This service, equipment, or drug is not covered under the patient's current benefit plan.

Common drivers: Service is on the plan's explicit exclusion list; drug is non-formulary or lacks an active exception; or equipment is categorized as non-covered under plan benefit design.

Root Causes

Service is on the plan's explicit exclusion list; drug is non-formulary or lacks an active exception; or equipment is categorized as non-covered under plan benefit design.

Action Plan

Pull the plan's Evidence of Coverage and confirm the specific service, drug National Drug Code (NDC), or equipment type is explicitly excluded or absent from covered benefits.
Determine whether a formulary exception, coverage exception, or alternative covered code exists.
If no coverage applies, post the contractual adjustment and advise the patient.

Appeal Tips

For drug denials, submit the prescribing physician's letter of medical necessity and evidence of formulary alternative failure or contraindication for a formulary exception.
For service or equipment denials, cite plan benefit language if the exclusion was misapplied.

Prevention Strategy

During benefits verification, check the plan's exclusion list specifically for the service, drug NDC, or equipment type - do not rely solely on a general eligibility response.
For high-risk services, obtain a pre-service coverage determination before rendering.

✅ Verified 2026-06-16 · Source: ASC X12 · Rendered live from the EDI Code Intelligence Lab data set.

🔗 Complete the Story, Find Your RARC Paired Code

CARC 204 is only half the answer. The RARC (Remittance Advice Remark Code) on your remittance tells you exactly what to fix.

Common RARCs that appear with CARC 204:

N10 Adjustment based on the findings of a review organization/professional consult/manual adjudication/medical advisor/dental advisor/peer review. N12 Policy provides coverage supplemental to Medicare. As the member does not appear to be enrolled in the applicable part of Medicare, the member is responsible for payment of the portion of the charge that would have been covered by Medicare. N129 Not eligible due to the patient's age. N130 Consult plan benefit documents/guidelines for information about restrictions for this service. N157 Transportation to/from this destination is not covered. N158 Transportation in a vehicle other than an ambulance is not covered. N171 Payment for repair or replacement is not covered or has exceeded the purchase price. N357 Time frame requirements between this service/procedure/supply and a related service/procedure/supply have not been met.

These pairings come from the most frequently occurring CARC/RARC combinations in production remittance data. Click any code to open it in the EDI Code Intelligence Lab.

What CARC 204 Actually Means

Claim Adjustment Reason Code (CARC) 204 is the plan-specific non-covered denial. The payer is telling you that this service, equipment, or drug is not a covered benefit under the patient's current plan. CARC 204 always ties back to a specific plan document: the Summary of Benefits, the Evidence of Coverage, or the plan's benefit grid. That document is where the answer lives.

CARC 204 is not a general coverage denial. It is a statement that the payer read the patient's specific plan and concluded the service is excluded. That distinction matters, because it changes how you work it. With CARC 96 (the general non-covered code), the denial can reflect a statutory exclusion, an NCD, or a coverage-rule decision. With CARC 204, the denial is always plan-document driven, which means the plan document is always the answer.

What the full brief covers

Signed-in members see the full brief. Here is what it contains.

Two Kinds of CARC 204
How to Read the Plan Document
The Group Code Determines Who Pays
How to Appeal CARC 204
When CARC 204 Is Genuinely Not Appealable
How to Prevent CARC 204 Denials

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