Insurance term
CARC (Claim Adjustment Reason Code)
Definition
A CARC is a standard code a payer puts on an ERA or EOB to explain why a claim or service line was paid differently from what was billed.
Why it matters for the front desk
Every adjustment on a remittance comes with a CARC, paired with a group code that shows who owes the difference: CO for a contractual write off the patient can't be billed for, PR for the patient's share. The code tells the team what to do next. CARC 45 (charge exceeds the allowed amount) is usually a routine write off, while codes like 27 (coverage terminated), 119 (benefit maximum reached) or 29 (timely filing expired) point to a problem to fix or appeal. Tracking denials by CARC shows which ones started at the front desk, before the claim was ever sent.
Related reading
Related terms
- EOB (Explanation of Benefits) An EOB is a statement from the insurance payer that explains how a claim was processed: what was billed, allowed, paid, adjusted and left for the patient.
- ERA (Electronic Remittance Advice) An ERA is the electronic version of an explanation of benefits, sent by the payer in the standard X12 835 format.
- Timely Filing Limit The timely filing limit is the deadline, set by the payer or the provider's contract, for submitting a claim after the date of service.