CARC codes tell you what a payer did with a claim. RARC codes tell you why, or what you need to do about it. Every claim on a remittance advice will have at least one CARC. Some, but not all, will also include one or more RARCs. Reading them together is the fastest way to work a denial correctly the first time.
This page defines both codes, explains the Group Codes (CO, PR, OA, PI) that sit alongside them, walks through five real-world CARC and RARC pairings, and shows how to read an ERA from left to right. If you have never seen a raw 835 remittance file, the EDI Lab has an interactive lookup for every published code.
Key takeaways
- CARC = what happened. "Not medically necessary." "Bundled." "Missing information."
- RARC = why it happened, or what to do next. "Missing diagnosis code." "Documentation does not support the level of service."
- Group Codes (CO, PR, OA, PI) sit in front of the CARC and tell you who is financially responsible for the adjustment.
- Read an ERA left to right: Group Code, then CARC, then RARC.
- Not every denial has a RARC. Some CARCs stand alone.
What is a CARC?
A CARC is a Claim Adjustment Reason Code. It is a two- or three-digit code that appears on the 835 ERA (Electronic Remittance Advice) or paper EOB to identify why a payer adjusted or denied a claim line. CARCs are maintained by the X12 committee and updated three times a year.
Every claim line that receives an adjustment other than a straightforward payment will have a CARC. If a payer paid the full billed amount at the contracted rate, no CARC is required. Any reduction, denial, or write-off must be explained with a CARC.
Common CARCs include:
- CARC 16: Claim lacks information or has submission errors
- CARC 29: Timely filing limit exceeded
- CARC 49: Routine or preventive service
- CARC 50: Not medically necessary
- CARC 97: Payment adjusted because the benefit is included in another service
- CARC 119: Benefit maximum for this period has been reached
- CARC 197: Precertification, authorization, or notification absent
What is a RARC?
A RARC is a Remittance Advice Remark Code. RARCs provide supplemental information about the adjustment the CARC already identified. RARC codes start with either M or N, followed by digits. Like CARCs, RARCs are maintained by CMS and updated regularly.
Where a CARC says what the payer did, a RARC explains why, or tells the biller what to do next. Not every claim adjustment includes a RARC. When it is included, it usually points to a specific field, document, or corrective action.
Common RARCs include:
- M76: Missing or invalid diagnosis or condition
- M119: Missing or invalid or incomplete drug or biological code
- N19: Procedure code incidental to primary procedure
- N56: Procedure code billed is not correct for the services rendered
- N130: Consult plan benefit documents or guidelines for information about restrictions
- N386: This decision was based on a National Coverage Determination (NCD)
Group Codes: CO, PR, OA, PI
Every CARC is preceded by a Group Code. The Group Code tells the biller who is financially responsible for the adjustment: the provider, the patient, another payer, or the payer initiating the reduction.
| Group Code | Meaning | Who pays? |
|---|---|---|
| CO | Contractual Obligation | Provider write-off. Cannot bill patient. |
| PR | Patient Responsibility | Patient owes. Bill the patient. |
| OA | Other Adjustment | Neither provider nor patient. Use when no other group applies. |
| PI | Payer Initiated Reduction | Payer decision not defined by contract. Often provider write-off. |
How CARC and RARC work together
On a real remittance advice, the codes appear in a specific order. Reading left to right: Group Code → CARC → RARC(s). That order tells you who is on the hook for the adjustment (Group Code), what the payer did (CARC), and why or what to do next (RARC).
Here are five common pairings the average practice sees every week:
| On the ERA | What it means | Action |
|---|---|---|
| CO-16 M76 | Claim lacks information — specifically, a missing or invalid diagnosis code. | Correct the diagnosis and resubmit as a corrected claim. |
| CO-97 N19 | Bundled into another procedure paid the same day — the code is incidental to the primary. | Verify the bundling edit. If separately billable, appeal with documentation. |
| CO-50 N386 | Not medically necessary based on a National Coverage Determination. | Pull the NCD, check the diagnosis code, and appeal with clinical evidence if the case fits. |
| PR-1 (no RARC) | Deductible amount. Patient responsibility. | Bill the patient. |
| CO-197 N130 | Precertification absent. Consult plan benefit documents for restrictions. | Confirm no retroactive auth is possible; if it is, request it. Otherwise, appeal. |
How to read an ERA line by line
The 835 ERA presents each claim line with the Group Code first, then the CARC, then any RARCs. Here is what that looks like in practice:
Claim: 20260714-XXXX
Line 1 CPT 99214 Billed $175.00 Allowed $118.42 Paid $94.74
Adjustments: CO-45 $56.58 (contractual write-off)
PR-2 $23.68 (coinsurance, patient owes)
Line 2 CPT 96372 Billed $28.00 Allowed $0.00 Paid $0.00
Adjustments: CO-97 $28.00 N19: Procedure incidental to primary
Line 1 was paid normally with a contractual adjustment and a patient coinsurance. Line 2 was bundled — the CO-97 tells you the payer denied it as bundled, and the N19 tells you the reason (incidental to the primary procedure on the claim).
Why this matters for your revenue
A biller who reads CARCs but skips the RARCs is guessing. The CARC alone tells you a claim was denied. The RARC tells you exactly which field, policy, or documentation to fix. Working denials without reading the RARC leads to appeals that get denied on the first pass because the wrong argument was made.
For every denial, the workflow is: Group Code first (who owes), CARC next (what happened), RARC last (why, or what to do). Get all three, and you know whether to bill the patient, correct and resubmit, or appeal.
Look up any denial code
The EDI Lab has an interactive lookup for every published CARC, RARC, and Group Code, with plain-language explanations and links to the right appeal playbook.
Open the EDI Lab →Frequently asked questions
What is the difference between CARC and RARC codes?
CARC tells you what the payer did with a claim line, for example that they reduced or denied payment. RARC explains why the payer took that action or what you should do next. CARC = what happened. RARC = why, or what to do about it. RARCs are usually included alongside CARCs on an ERA or EOB, but not every denial has a RARC attached.
Can a claim line have multiple RARCs?
Yes. A single CARC can be followed by one or more RARCs when the payer wants to communicate multiple pieces of supplemental information. This is common with CARC 16 (missing information) where several fields might be incorrect at once, each identified by a separate RARC.
Do RARCs appear on paper EOBs too?
Yes. RARCs are included on both electronic 835 ERAs and paper EOBs. The layout differs by payer, but the codes themselves are standardized nationally.
Are CARC and RARC codes the same across all payers?
The code sets themselves are standardized nationally, maintained by the X12 committee and CMS. Every payer must draw from the same list. What differs is which codes each payer prefers to use for a given denial scenario, and how strictly they interpret the definitions.
Where can I find the official CARC and RARC lists?
The Washington Publishing Company (X12.org) publishes the authoritative code lists. CMS also republishes them with plain-language descriptions and update schedules. The EDI Lab on this site presents the same codes with practical guidance for revenue cycle staff.