When can I appeal a CARC 97 bundling denial?

You can appeal when the services were genuinely distinct (different sites, sessions, or organ systems) and the NCCI edit indicator is 1. Attach documentation that supports the distinct-service claim.

Should I use modifier 59 or an X-modifier?

X-modifiers (XE, XP, XS, XU) are more specific than 59 and are preferred by CMS and most commercial payers. Use 59 only when no X-modifier applies.

Back to library

Denial Brief

CARC 97: Service Bundled into Another Payment. What it means, and how to appeal it.

Q: What does CARC 97 mean?

CARC 97 means 'The benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated.' The payer is saying this service is bundled.

Last updated: August 2026

CARC 97 means the payer considers one of your billed procedures already included in payment for another procedure. Sometimes the payer is right: the CMS National Correct Coding Initiative edits pair the codes as component and comprehensive, and the write-off is correct. Sometimes the payer is wrong: the two services were performed at separate sites, on separate injuries, or in separate sessions, and the correct answer is a modifier and an appeal. Reading the code correctly is how you decide whether to write it off or recover it.

By Mindy Corbett, CSPO, CPC, CPB, CPPM · 5 min read

Rendered live from the EDI Code Intelligence Lab data set

CARC 97

CLAIM ADJUSTMENT REASON CODE

The benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated. Usage: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.

Medium Risk

What This Means

Reimbursement for this service is already included in the payment for another adjudicated service on the claim; it is not separately payable.

Common drivers: NCCI bundling edit includes the denied code inside the primary procedure's payment; missing modifier 59 or X modifier for a genuinely separate service; or an add-on code submitted without its required primary code.

Root Causes

NCCI bundling edit includes the denied code inside the primary procedure's payment; missing modifier 59 or X modifier for a genuinely separate service; or an add-on code submitted without its required primary code.

Action Plan

Look up the denied code pair in the NCCI (National Correct Coding Initiative) edit table.
Check the modifier indicator: a '0' means the codes can never be billed together - post the adjustment.
A '1' means modifier 59 (or X modifiers XS, XE, XP, XU) can separate them - only if documentation supports a distinct site, session, or procedure.
If a valid modifier applies, resubmit.

Appeal Tips

Verify the NCCI modifier indicator: '0' means unbundling is never allowed; '1' means a modifier works if the service was separate.
If the indicator is '1' and modifier was omitted, file a corrected claim over a narrative appeal.
If a modifier was appended and still denied, appeal with documentation of the distinct site, session, or location.
For payer-specific edits more restrictive than NCCI, request the rationale.

Prevention Strategy

Load the current-quarter CMS NCCI edit table into your claim scrubber and update it quarterly when CMS publishes a new release.
Train coders on the correct use of X modifiers XS, XE, XP, XU and modifier 59. Compliance checks should be implemented to prevent reflexive use of these modifiers to bypass edits.
Run a monthly report of CARC 97 denials by code pair; for recurring distinct-service pairs, create a modifier-use protocol.

✅ 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 97 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 97:

M2 Not paid separately when the patient is an inpatient. M15 Separately billed services/tests have been bundled as they are considered components of the same procedure. Separate payment is not allowed. M80 Not covered when performed during the same session/date as a previously processed service for the patient. M86 Service denied because payment already made for same/similar procedure within set time frame. M97 Not paid to practitioner when provided to patient in this place of service. Payment included in the reimbursement issued the facility. M109 We have provided you with a bundled payment for a teleconsultation. You must send 25 percent of the teleconsultation payment to the referring practitioner. M112 Reimbursement for this item is based on the single payment amount required under the DMEPOS Competitive Bidding Program for the area where the patient resides. M144 Pre-/post-operative care payment is included in the allowance for the surgery/procedure.

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 97 Actually Means

Claim Adjustment Reason Code (CARC) 97 is a bundling denial. The payer is telling you that one of the procedures on your claim is considered part of another procedure that was already paid, either on the same claim or on a prior claim. The payment for the comprehensive procedure is considered to include the payment for the component procedure.

This is one of the most misunderstood denial codes in billing, because sometimes the payer is correct and sometimes they're not. Knowing the difference is what determines whether you write it off or fight it.

CARC 97: Service Bundled into Another Payment. What it means, and how to appeal it.

What CARC 97 Actually Means

What the full brief covers

Subscribe to read the full denial brief.