CARC vs RARC: How to Read a Remark Code on Your ERA

A CARC explains the difference between billing and payment of a claim or service line, whereas a RARC tells about the limitation and payment. Both of these are important to know, along with the group code in front of the CARC, and are important in deciding whether to fix, appeal, bill the patient, or write off the claim. The article outlines the dissimilarities between the two.

The article shows the places of codes in 835 electronic remittance advice (ERA) and provides a step-by-step guide on how to read remark codes. The article provides some examples of CARC and RARC combinations. It also explains the meanings of MA130 and the values of CAQH CORE 360 principles.

What Is a CARC (Claim Adjustment Reason Code)?

A Claim Adjustment Reason Code (CARC) refers to a basic code that describes the basis of payment for a particular claim or service line. It includes reasons for denials, reductions, and the standard adjustments on each remittance, such as CARC 1 (deductible), CARC 2 (coinsurance), CARC 3 (copay), and CARC 45 (charge more than the fee schedule or contracted amount).

All CARCs are maintained by a national code maintenance group and are issued through X12. HIPAA legislation requires that, beyond its own codes, the payer uses these codes under the 835. 

Many CARCs include very broad language. CARC 16 explains that the claim is lacking information or is otherwise erroneous. It does not specify the field in question; this is specified through a remark code. Some of these codes also include the usage note that states that you should reference the 835 Healthcare Policy Identification section when the code is provided,  as this is where the policy leading to the decision is referenced.

What Is a RARC (Remittance Advice Remark Code)?

A Remittance Advice Remark Code (RARC) elaborates on an adjustment that has already been given by a CARC or assists in providing details regarding the processing of the remittance. The RARC list is maintained at the national level by CMS, published by X12, and used by anyone who has a health plan.RARCs are characterized by a letter prefix (i.e., M, MA, or N). Each letter refers to a different message meaning. Thus, M51 can be used to say that the procedure code is invalid, missing, or incomplete, while N290 means that there is a rendering provider’s identifier missing. It is important to note that RARC never includes any amounts.

RARCs can be of two types; the majority of them serve as supplements that explain the adjustment made by CARC, and the rest are informational types characterized by starting with the word “Alert:” and are not related to any adjustments or CARC. For instance, MA01 serves as an Alert describing the appeal process.

CARC vs RARC: The Core Difference

The CARC gives the category of the problem and carries the money; the RARC narrows it to the exact cause. Think of the CARC as the headline and the RARC as the detail you act on.

CARC vs RARC at a glance

Feature	CARC	RARC
What it answers	Why payment differs from the billed charge	What exactly caused it, or extra processing information
Maintained by	National Code Committee, published by X12	CMS, published by X12
Format	Numbers or letter-number (16, 97, B7)	Letter prefix M, MA or N (M15, MA130, N290)
Paired with	A group code (CO, PR, OA or PI)	A CARC, except Alerts
Dollar amount	Yes, the adjustment amount	No
Location on the 835	CAS segment, claim or service line	MIA or MOA (claim), LQ (service line)

Where CARCs and RARCs Sit on the 835 ERA

Under the 005010X221A1 version of the 835, which was endorsed by HIPAA, CARC codes can be found within the CAS segment, and RARC codes appear in the MIA, MOA, or LQ segments. The segment that you discover the code in tells you if the code is pertinent to the entire claim or to an individual line.

Group Codes: Who Owes the Adjusted Amount?

Some CARC codes impose certain restrictions on their application. For example, CARC 18 applies only in relation to OA unless CO is required under relevant state regulations governing indemnity; meanwhile, CARC 45 relates to either PR or CO as per liability terms. In addition, the Medicare program sends out the MA13 message, advising the providers of the possible penalties they may face when an excess is charged beyond PR limits to the patients. It is, therefore, advisable to take advantage of our insurance verification services and receive this amount of PR at the time of visit rather than after receiving the remittance.

• CO (Contractual Obligation): In this case, the provider agrees to eliminate the amount. The patient cannot be charged with CO adjustments in the case of Medicare claims.
• PR (Patient Responsibility): The amount can be charged to the patient, for instance, the deductible – PR-1, coinsurance – PR-2, or copayments – PR-3.
• OA (Other Adjustments): This term is used when neither CO nor PR applies, for example, in OA-23 for corrections made by the previous insurer before our claim.
• PI (Payer Initiated Reductions): This term is applicable where the insurance company reduced the sum to be paid, but it does not mean the existence of a contractual obligation.
• CR (Corrections and Reversals): The use of this adjustment is banned by X12 since version 005010 and later.

Certain CARC codes limit their scope of application. For example, CARC 18 (similarly appearing CARC) applies only in connection with OA except when CO is required pursuant to the relevant state compensation regulations, while CARC 45 applies either to PR or to CO in accordance with conditions of liability involved. 

In addition, the Medicare program issues the MA13 message to the providers, notifying them of the potential sanctions they may have to face in particular situations where the patients are being charged excess amounts beyond PR limits.

How to Read a Remark Code in 7 Steps

Read the group code, CARC, and every RARC on the same line as one message, then pick the action. This is the order we use on every ERA:

Adjustment message = Group code + CARC + RARC(s)

1. Find the level. Check whether the adjustment sits at claim level (loop 2100) or service line level (loop 2110). Line-level codes only apply to that line.
2. Read the group code. CO, PR, OA, or PI tells you who owes the adjusted amount.
3. Read the CARC. It gives the category: missing data, bundling, medical necessity, eligibility, timely filing.
4. Read every RARC. The claim-level segment can hold up to five, and the most useful one is not always first.
5. Separate Alerts from supplemental RARCs. An Alert tells you something about processing. It is not the reason for the denial.
6. Check the policy reference. If the payer sent a Healthcare Policy Identification REF in loop 2110, look up that policy before you act.
7. Pick the action. Correct and resubmit, send a corrected claim, appeal, bill the patient, or write off with approval.

Worked example: a bundled service

Here is a quick example. The amounts below are made up to show the reading and are not Medicare rates. A practice bills 97010 (hot or cold packs) for $25.00 with a therapy visit. The service line on the ERA shows:

As per the precedents of billing, CO has imposed a $25 fee on the practice. According to CARC 97, the payment is inclusive of the convenience fee. RARC M15 has explained the reason as the billing of different services in a package. According to First Coast Service Options, the Medicare Administrative Contractors in charge have classified the code 97010 as bundled and denoted it with a “B” symbol, which leads to the misconception that separate payment is not needed even if a modifier is used. Accordingly, you are correct in writing off the fees.

Worked example: a rejected claim

A secondary line reports on CAS*CO*16 together with RARCs M51 and MA130. CARC 16 indicates a lack of necessary information. M51 explains that the procedure code is either absent, insufficient, or invalid. MA130 indicates that the claim is unprocessable, thereby making it impossible to appeal. The suggested remedy involves changing CPT or HCPCS codes and re-filing the claim. A request for redetermination will not be productive.

Which CARCs Always Need a RARC?

Several broad CARCs require at least one remark code that is not an Alert, because the CARC alone cannot tell you what to fix. The X12 descriptions for these codes state the requirement directly.

Since 2007, CMS has required the use of remark codes that are related to their most general CARCs as stated in Chapter 22 of the Medicare Claims Processing Manual. They also require Medicare contractors to provide at least one remark code each time when the CARC does not give sufficient information to adequately explain the alteration made to the payment made. In case you have received a CARC without the accompanying RARC, it is advisable to contact the payer and ask for more information.

Common CARC and RARC Pairs and How to Fix Them

The code pair, not the CARC alone, points to the fix. Several pairs below appeared on First Coast’s list of the most common Medicare Part B denials and rejections for April to June 2026.

Common remark code pairs, meanings, and fixes

Code pair	What it means	What to do
CO-16 + M51	Procedure code missing, incomplete, or invalid	Confirm the CPT or HCPCS code is valid for the date of service, correct it, and send a new claim.
CO-16 + N290	Rendering provider NPI missing, invalid, or not linked to the billing group	Check the rendering NPI and its link to the group’s enrollment, then resubmit.
CO-16 + M123	Drug name, strength, or dosage missing	For a not otherwise classified drug code, add the drug description and dosage in the claim narrative.

Code pair	What it means	What to do
CO-4 + N519	Invalid combination of HCPCS modifiers	Fix the modifier combination and resubmit.
CO-97 + M15	Bundled as a component of the same procedure	Check NCCI edits and fee schedule status. Use a modifier only when the edit allows it and the note supports it.
CO-97 + M144	Pre- or post-operative care included in the surgery allowance	If the visit was unrelated to the surgery, rebill with the correct modifier and documentation.
CO-50 + N115	Not medically necessary under a Local Coverage Determination (LCD)	Compare the diagnosis and note to the LCD. Correct coding or file a redetermination.
CO-50 + N386	Decision based on a National Coverage Determination (NCD)	Check the NCD criteria in the Medicare Coverage Database before appealing.
OA-18 + N522	Duplicate of a claim processed, or to be processed, as a crossover	Check claim status before resubmitting. First Coast suggests allowing 14 to 29 days for processing.
PR-96 + N425	Statutorily excluded service	The PR group means the balance can be billed to the patient.

In this chart, it is easy to confuse the two codes. Code N115 relates to a Local Coverage Determination issued by your Medicare administrative contractor (MAC), while code N386 refers to a National Coverage Determination issued by the Centers for Medicare & Medicaid Services (CMS). Make sure you are referencing the correct policy before proceeding to appeal. Other code combinations such as CO-16 with M51 or CO-97 with M15 are commonly resolved in advance by our medical coding solutions.

MA130: The Remark Code That Changes Your Next Step

MA130 signifies that the claim is either incomplete, invalid, or unattainable, and there are no chances for appeal; hence, the only recourse is filing a new claim with updated information. Claim MA130 is treated as a rejection rather than a denial by Medicare.  Medicare contractors do not recognize redetermination or reopening requests concerning claims coded MA130. 

The code MA130 is often accompanied by other remark codes such as M51 and N290, which indicate the actual mistake committed while preparing the claim; hence, it is important to read them all before preparing a new claim. On the contrary, the initial appeal against a true denial of Medicare is termed a redetermination, which should be filed within 120 days of receiving the original claim. 

The recipient is considered to have received the original claim within 5 days from the date of notice. Be sure to check payer policies on commercial and Medicaid appeal limitations as they differ amongst various payers.

CAQH CORE 360: Why Payers Pair Codes the Way They Do

The CORE 360 Uniform Use of CARCs and RARCs regulation specifies the upper limit of combinations of CARC, RARC, and group codes that can be applied by the payers covering four widely accepted business situations. This regulation is an important component of the federally approved Phase III EFT and ERA operating rules that have been in effect since January 1st, 2014.

The four business situations established by CORE are:

As for these four situations stated above, Medicare must use available code combinations from the CORE list provided to payers only. In other situations, combinations may vary.

How Often Do CARC and RARC Lists Change?

Three times every year, the X12 updates the CARC and RARC lists, which happens on or around March 1, July 1, and November 1. CMS then issues a recurring change request to Medicare contractors instructing them to load the newly updated codes and discontinue the use of the deactivated codes.

If your practice management system is using an old code table, your workforce will process the remits of today using the definitions of yesterday. Update your code table following every March, July, and November update and review any automated rules based on the pairs of codes.

How A2Z Helps Practices Turn Remark Codes Into Payments

We read every CARC and RARC at the line it belongs to and route each one to the person who can fix it.

Line-level posting

Every CAS, MOA, and LQ segment is posted where it sits, so line adjustments never get lumped into a claim total.

Routed to the right work queue

CO-16 goes to claim correction, CO-50 to appeals, PR amounts to patient billing, and CO contractual amounts to a write-off review you approve.

Root-cause reporting by code pair

You see which code pairs repeat, payer by payer and provider by provider, along with the upstream fix for each.

Code tables kept current.

We update CARC and RARC tables after each March, July, and November release. A2Z works inside your existing system with role-based access under a business associate agreement, so no migration is needed.

Frequently Asked Questions

What is the difference between a CARC and a RARC?

A CARC explains why a claim or line was paid differently than billed and carries the dollar amount. A RARC adds the specific detail behind that CARC, or gives processing information as an Alert.

Can a RARC appear without a CARC?

Yes, but only an Alert. Supplemental RARCs always explain an adjustment a CARC describes, while Alerts carry general information and can stand alone.

What does CO-16 mean on an ERA?

CO-16 means the claim or service lacks information or has a billing error, and the provider carries the amount. The RARC sent with it, such as M51 or N290, tells you which field to fix.

Where is the remark code on an 835 file?

Claim-level RARCs sit in the MIA or MOA segment in loop 2100. Line-level RARCs sit in the LQ segment in loop 2110.

What does remark code MA130 mean?

MA130 means the claim is unprocessable because of incomplete or invalid information. There are no appeal rights, so you correct the data and send a new claim.

Who maintains CARC and RARC codes?

A national code maintenance committee maintains CARCs, and CMS maintains RARCs. X12 publishes both lists.

How often are CARC and RARC codes updated?

Three times a year, on or around March 1, July 1, and November 1. Refresh your system’s code tables after each release.

Do commercial payers use the same CARC and RARC codes?

Yes. HIPAA requires standard codes on the 835, and any payer may use RARCs. How a payer pairs them can differ, so check your payer’s companion guide.

Get Your Remark Codes Worked

Provide us with the newest set of ERAs, and we will identify the CARC and RARC pairs causing your cash flow issues. We recommend starting with our denial management services or our medical coding services.