What is the difference between CARC 96 and CARC 204?

CARC 96 is the generic non-covered-charge denial. The service is not covered, and the reason lives in the RARC. CARC 204 is more specific: the service, equipment, or drug is not covered under the patient's current benefit plan. CARC 204 usually points to a plan exclusion or benefit design issue, while CARC 96 can mean anything from a statutory exclusion to a medical-necessity denial. Always read the RARC to know which subtype you have.

Can I bill the patient for a CARC 96 denial?

Sometimes. Group code determines it. If the CARC 96 arrives with PR (patient responsibility) and, for Medicare, you have a signed valid ABN on file with the correct GA modifier, you can bill the patient. If it arrives with CO (contractual obligation), you cannot bill the patient. For commercial payers, patient billing depends on your provider agreement and whether the patient signed a private-pay or non-covered-service acknowledgment before the service was rendered.

Should I appeal a non-covered service denial?

It depends on why the service was denied. Statutory exclusions (services Medicare or the plan by law does not cover) are not appealable in most cases; the fix is patient responsibility routing. Plan exclusions are usually not appealable unless there is a coverage exception process. Medical-necessity denials tied to a policy interpretation are the most appealable subtype: you can submit clinical documentation supporting the service and cite the payer's own medical policy if it supports coverage under the circumstances.

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Non-Covered Service Denial: what it means, and how to appeal it.

Non-covered service denials are the most misclassified denials in most practices. CARC 96 and CARC 204 look almost the same on the ERA and behave completely differently in the resolution path. One might be a statutory exclusion that needs to route straight to the patient. Another might be a medical-necessity denial that a clean appeal recovers in full. The RARC is what tells you which one you actually have.

Last verified July 9, 2026 against the current ASC X12 CARC/RARC master lists and CMS ABN guidance. Source: ASC X12, CMS

From the EDI Code Intelligence Lab

CARC 204. Not covered under the patient's current benefit plan.

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.

CARC 96 always travels with a RARC that tells you why.

CARC 96 is "non-covered charge(s)". The ASC X12 rules require at least one Remark Code with CARC 96, so it never appears alone on a valid remittance. Two common pairings are shown below. Every other CARC 96 pairing lives in the EDI Code Intelligence Lab.

CARC 96 + RARC N130. Consult plan benefit documents.

CARC 96

RARC N130

This combination tells a more specific story than CARC 96 alone. The CARC identifies the category of denial; RARC N130 points to the specific field, data element, or clinical element driving it. The charges are not covered under the patient's plan. CARC 96 identifies non-coverage but does not, on its own, state the specific exclusion basis.

Common drivers: 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.

CARC 96 with RARC N130 - Billed Service Not Covered by Health Plan scenario.

RARC N130, Official Definition

Consult plan benefit documents/guidelines for information about restrictions for this service.

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

Review the payer's policy and plan exclusion/provisions related to this denial/service
Review documentation to determine if visit meets payer requirements
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

Complete Action items, then determine if an appeal or a corrected claim is required.
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.

CARC 96 + RARC M25. Payment adjusted, information does not support this level of service.

CARC 96

RARC M25

This combination tells a more specific story than CARC 96 alone. The CARC identifies the category of denial; RARC M25 points to the specific field, data element, or clinical element driving it. The charges are not covered under the patient's plan. CARC 96 identifies non-coverage but does not, on its own, state the specific exclusion basis.

Common drivers: 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.

CARC 96 with RARC M25 - Billed Service Not Covered by Health Plan scenario.

RARC M25, Official Definition

The information furnished does not substantiate the need for this level of service. If you believe the service should have been fully covered as billed, or if you did not know and could not reasonably have been expected to know that we would not pay for this level of service, or if you notified the patient in writing in advance that we would not pay for this level of service and he/she agreed in writing to pay, ask us to review your claim within 120 days of the date of this notice. If you do not request an appeal, we will, upon application from the patient, reimburse him/her for the amount you have collected from him/her in excess of any deductible and coinsurance amounts. We will recover the reimbursement from you as an overpayment.

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

Review the payer's policy and plan exclusion/provisions related to this denial/service
Review documentation to determine if visit meets payer requirements
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

Complete Action items, then determine if an appeal or a corrected claim is required.
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.

Common RARC pairings with CARC 96

These pairings and definitions can also be found in the EDI Code Intelligence Lab. ASC X12 Definitions are sourced from x12.org/codes/remittance-advice-remark-codes. Business Scenarios are sourced from CAQH CORE required code combinations (v3100, February 2026).

RARC	Official definition (ASC X12)	Business scenario (CAQH CORE)
M1	X-ray not taken within the past 12 months or near enough to the start of treatment.	Billed Service Not Covered by Health Plan
M2	Not paid separately when the patient is an inpatient.	Billed Service Not Covered by Health Plan
M3	Equipment is the same or similar to equipment already being used.	Billed Service Not Covered by Health Plan
M8	We do not accept blood gas tests results when the test was conducted by a medical supplier or taken while the patient is on oxygen.	Billed Service Not Covered by Health Plan
M13	Only one initial visit is covered per specialty per medical group.	Billed Service Not Covered by Health Plan
M18	Certain services may be approved for home use. Neither a hospital nor a Skilled Nursing Facility (SNF) is considered to be a patient's home.	Billed Service Not Covered by Health Plan
M25	The information furnished does not substantiate the need for this level of service. If you believe the service should have been fully covered as billed, or if you did not know and could not reasonably have been expected to know that we would not pay for this level of service, or if you notified the patient in writing in advance that we would not pay for this level of service and he/she agreed in writing to pay, ask us to review your claim within 120 days of the date of this notice. If you do not request an appeal, we will, upon application from the patient, reimburse him/her for the amount you have collected from him/her in excess of any deductible and coinsurance amounts. We will recover the reimbursement from you as an overpayment.	Billed Service Not Covered by Health Plan
M26	The information furnished does not substantiate the need for this level of service. If you have collected any amount from the patient for this level of service/any amount that exceeds the limiting charge for the less extensive service, the law requires you to refund that amount to the patient within 30 days of receiving this notice. The requirements for refund are in 1824(I) of the Social Security Act and 42CFR411.408. The section specifies that physicians who knowingly and willfully fail to make appropriate refunds may be subject to civil monetary penalties and/or exclusion from the program. If you have any questions about this notice, please contact this office.	Billed Service Not Covered by Health Plan
M28	This does not qualify for payment under Part B when Part A coverage is exhausted or not otherwise available.	Billed Service Not Covered by Health Plan
M37	Not covered when the patient is under age 35.	Billed Service Not Covered by Health Plan
M41	We do not pay for this as the patient has no legal obligation to pay for this.	Billed Service Not Covered by Health Plan
M55	We do not pay for self-administered anti-emetic drugs that are not administered with a covered oral anti-cancer drug.	Billed Service Not Covered by Health Plan

This is one page. The Lab has every CARC and RARC in use today.

Root causes, action plans, appeal guidance, and prevention strategy for every code, plus the CARC and RARC pairing tool that completes the picture. Verified against the current ASC X12 master lists. Not a glossary. A playbook.

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This page helps you understand denial codes and build a starting point for resolution. Every denial has context that only the payer and the claim can provide. Before submitting an appeal or corrected claim, verify the payer's published policies and contact them directly with questions about your specific situation.