What does CARC 96 mean?

CARC 96 is the general non-covered charge denial. It means at least part of the billed service is not covered under the patient's plan. X12 requires a Remittance Advice Remark Code (RARC) to accompany CARC 96 that explains the specific reason for non-coverage.

Can I appeal a CARC 96 denial?

Sometimes. Appeal when the plan document actually covers the service, when the payer applied the wrong policy, when the group code is inconsistent with the RARC, or when the service was pre-authorized as covered. Do not appeal statutory exclusions (RARC N425) or NCD-based denials (RARC N386) through a plan appeal.

Is CARC 96 the same as CARC 204?

No. CARC 96 is the general non-covered charge code. CARC 204 is the plan-specific non-covered code ("not covered under the patient's current benefit plan"). CARC 204 always ties back to a specific plan document; CARC 96 can also reflect statutory exclusions, policy exclusions, or coverage-rule denials.

What group code should CARC 96 have?

It depends on the exclusion type. PR (Patient Responsibility) when the plan does not cover the service but the patient can be billed. CO (Contractual Obligation) when the provider must write it off. OA or PI when the payer is making an internal adjustment. The wrong group code paired with CARC 96 is one of the most common billing errors.

CARC 96: Non-Covered Charge Denial Reason

What CARC 96 Actually Means

Official Definition:

The official X12 definition of Claim Adjustment Reason Code 96 is "Non-covered charge(s). At least one Remark Code must be provided (may be comprised of either the NCPDP Reject Reason Code, or Remittance Advice Remark Code that is not an ALERT.) Usage: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present."

In plain language:

CARC 96 is a relatively generic denial category. On its own, it tells you that a billed service is not covered under the patient's specific health plan, but it does not state the specific exclusion basis. This denial can be the result of a plan exclusion, a benefit limitation, an out of network service, a missing financial responsibility waiver, or some other reason for a service to be explicitly excluded under the patient's plan. CARC 96 is typically NOT used for medical necessity denials. These are plan specific exclusions. In order to understand the exact reason a Remark code is required (Remittance Advice Remark Code, RARC).

Because of the nuance involved with this denial, it is often misunderstood and can cause a lot of frustration. Understanding where and how to find the remark codes is incredibly important, as is a clear understanding of payer coverage rules. Having links to payer policies on hand should be a priority.

Read the Group Code First

CARC 96 is not always provider liability. Keep this in mind. Review the group code along with the adjustment code and the remark code. They are all important.

CARC 96 paired with group code "PR" is patient responsibility and can be billed to the patient. If it is paired with group code "CO" it needs to be reviewed to determine if there was a billing error that needs to be corrected or if it was denied in error and needs to be appealed.

Don't Skip the RARC

Don't assume that CO-96 or PR-96 is it and move on. Look for the RARC/Remark code. This is where you get the complete details. There are many remark codes that you might see CARC 96 paired with. Each means something different. Take the time to understand them and understand the payer policy that drives them.

Here are a few examples:

RARC	X12 Description	What It Means in Plain Language	What to Do
N130	Consult plan benefit documents/guidelines for information about restrictions for this service.	Check the patient's benefits/plan documents for more information about why this is excluded.	Pull the plan's benefit summary or local coverage determination and identify the specific coverage restriction.
N425	Statutorily excluded service(s).	There is a legal statute excluding this service, typically Medicare. Generally, this is not just a specific payer policy.	Verify if you have a signed ABN for this service on file. If so, and the group code is "PR" you can bill the patient. If the group code is "CO" the provider is contractually liable so you will have to adjust this balance.
N431	Not covered with this procedure.	The payer's coverage policy does not allow this procedure code combination.	Review CPT selection and payer policy for this specific code combination.
N569	Not covered when performed for the reported diagnosis.	This procedure is not covered under this payer's policy for the diagnosis reported.	Review Dx-to-procedure medical necessity mapping and LCD if Medicare.
N180	Item or service does not meet the criteria for the category under which it was billed.	The billing category is wrong for what was actually provided.	Review HCPCS or CPT category selection. Correct coding, if incorrect, and submit a corrected claim.
N115	This decision was based on a Local Coverage Determination (LCD).	A Medicare Administrative Contractor has published an LCD that excludes this service in this scenario.	Pull the specific LCD from the MAC website and review coverage criteria. If denial was in error, gather supporting documents including highlighted LCD text.

Example Pairing and Strategy: CARC 96 + RARC N425

X12 Official Definition of RARC N425: Statutorily excluded service(s).

CARC 96 + RARC N425 = This service is not covered because it is statutorily excluded.

What this CARC+RARC pair actually means: When CARC 96 is paired with RARC N425 it means that the service is legally excluded from coverage under the patient's current benefit plan. Common causes for this include services that are not covered by law or policy, procedures that Medicare or Medicaid have determined are not medically necessary, services that were provided outside the coverage period, and treatments classified as experimental or investigational.

Targeted Action Plan:

Verify the service is truly statutorily excluded for this payer and plan.
Review documentation to determine if visit meets payer requirements.
Check coding and modifiers. The service could be missing a required modifier (e.g., GY).
Check diagnosis coding and linkage for accuracy.
Review and validate documentation.
If visit meets payer requirements for payment, record findings and reasoning, pull a copy highlighting the section of the payer policy that supports your claim that the visit meets the guidelines listed in the policy, and attach it with your appeal letter and documentation.

Appeal Tips:

Correct any coding errors or missing modifiers.
Correct any incorrect diagnosis codes or linkage.
If the denial was caused by any of the above, this might be resolved with a corrected claim. If that is the case, prepare a corrected claim.
Submit a corrected claim, making sure that the claim frequency code is updated ("7," in most cases) to prevent being denied as a duplicate, and the payer's original claim number is included.
For ALL reworked claims (appealed/corrected/resubmitted): your standard workflow process should include a 24-hour follow-up to check in with the clearinghouse to validate that all corrected claims show "accepted" and that they have not been rejected as a duplicate.
Set a follow-up date and track the claim to ensure timely payment.

Prevention Strategy:

Ensure all services provided are covered under the patient's current insurance plan by conducting thorough eligibility and benefits verification before the service is rendered.
Implement a robust pre-authorization process to identify any services that are excluded prior to seeing the patient.
Keep track of and update your billing team on all new healthcare legislation and insurance policies to minimize the risk of rendering statutorily excluded services.
Educate healthcare providers on the most common services that fall under this exclusion.

✓ Verified 2026-08-14 · Source: ASC X12

Rendered live from the EDI Code Intelligence Lab data set

CARC 96

RARC N425

When CARC 96 is paired with RARC N425 it means that the service is legally excluded from coverage under the patient’s current benefit plan. Common causes for this include services that are not covered by law or policy, procedures that Medicare or Medicaid have determined are not medically necessary, services that were provided outside the coverage period and treatments classified as experimental or investigational

CARC 96 with RARC N425 - Billed Service Not Covered by Health Plan scenario.

RARC N425, Official Definition

Statutorily excluded service(s).

Root Causes

Plan exclusion or benefit limitation applicable to the billed service; financial-responsibility waiver not obtained before rendering a routinely excluded service; or CPT/HCPCS billed for a non-covered service category.

Action Plan

Verify the service is truly statutorily excluded for this payer and plan.
Review documentation to determine if visit meets payer requirements
Check coding and modifiers. The service could be missing a required modifier (e.g., GY)
Check diagnosis coding and linkage for accuracy
Review and validate documentation
if visit meets payer requirements for payment, record findings, and reasoning, pull a copy highlighting the section of the payer policy that supports your claim that the visit meets the guidelines listed in the policy, and attach it with your appeal letter and documentation

Appeal Tips

Correct any coding errors or missing modifiers
Correct any incorrect diagnosis codes or linkage
If the denial was caused by any of the above, this might be resolved with a corrected claim. If that is the case, prepare a corrected claim
If a corrected claim is required:
Submit a corrected claim, making sure that the claim frequency code is updated ("7", in most cases) to prevent being denied as a duplicate, and the payer's original claim number is included
For ALL reworked claims (appealed/corrected/resubmitted):
Your standard workflow process should include a 24 hour follow up to check in with the clearinghouse to validate that all corrected claims show "accepted" and that they have not been rejected as a duplicate
Set a follow up date and track the claim to ensure timely payment

Prevention Strategy

During benefits verification, explicitly confirm whether the specific CPT/HCPCS is covered; general eligibility confirmation is not enough.
For frequently non-covered services, obtain a signed patient financial-responsibility waiver before rendering.
Audit CARC 96 denials quarterly by CPT and payer; for high-denial codes, investigate alternative covered codes or pre-authorization pathways.

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

When to Appeal a CARC 96 Denial

Appeal a CARC 96 denial when what you originally billed was correct, you are 100% sure the denial was in error, you have the documentation to support your case, and you can prove that the payer policy or statutory guidelines can back it up. These are only winnable if you can prove that you have met the guidelines. Have a bulletproof list. Highlight the text in the statute or guideline where your documentation, claim, and coding meets the criteria. Label everything and make sure that it is abundantly clear what each piece of information is, what it indicates, and what piece of information it supports. Keep records, follow up, and make sure that your contact information is included on the appeal.

Final Thoughts

CARC 96 is a category, not a conclusion. Read the group code, read the RARC, and read the payer policy before you write off or appeal. The teams that work CARC 96 well are the teams that have the plan documents and payer coverage rules on hand before the denial ever arrives.

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Non-Covered Charge. CARC 96. What does that mean?