Common denial codes in medical billing tell your team why a payer reduced, denied, or adjusted a claim. Some point to missing information. Others involve coverage, coding, prior authorization, medical necessity, or filing deadlines. The key is to read the full remittance before correcting or appealing a claim.
A denial code should not be read by itself. Billing teams should review the group code, Claim Adjustment Reason Code (CARC), and any Remittance Advice Remark Code (RARC) sent with it. Together, these codes give a clearer picture of what happened and what to do next.
What Are Denial Codes in Medical Billing?
Medical billing denial codes are standardized codes used on remittance advice to explain why a claim or service line was paid differently from the amount billed. The main reason code is called a CARC. A RARC may provide added detail about the adjustment.
What Do CO, PR, OA and PI Mean?
| Group Code | Meaning | What It Usually Tells You |
|---|---|---|
| CO | Contractual Obligation | The adjustment is generally assigned to the provider under the payer arrangement. |
| PR | Patient Responsibility | The amount may be assigned to the patient, such as an allowed deductible, coinsurance, or copay. |
| OA | Other Adjustment | An adjustment that does not fit the main provider or patient responsibility categories. |
| PI | Payer Initiated Reduction | A reduction initiated by the payer. |
Do not decide who owes the balance from the CARC number alone. Read the group code and payer explanation before moving any amount to the patient.
List of Common Denial Codes in Medical Billing
| Code | Plain-English Meaning | Common First Action |
|---|---|---|
| CARC 4 | Procedure code and modifier do not match | Review the procedure, modifier, documentation, and payer coding rules. |
| CARC 11 | Diagnosis does not support the procedure as submitted | Check the diagnosis, procedure, documentation, and payer coverage policy. |
| CARC 16 | Missing information or billing/submission error | Read the RARC, correct the identified error, and submit the proper correction. |
| CARC 18 | Exact duplicate claim or service | Check the original claim before sending anything again. |
| CARC 22 | Another payer may be responsible | Review coordination of benefits and payer order. |
| CARC 27 | Service occurred after coverage ended | Verify eligibility for the date of service. |
| CARC 29 | Filing deadline expired | Check timely filing rules and proof of the original submission. |
| CARC 45 | Charge is above the allowed or contracted amount | Compare the payment with the contract or fee schedule. |
| CARC 50 | Service was not considered medically necessary by the payer | Review coverage rules and supporting clinical documentation. |
| CARC 96 | Non-covered charge | Read the RARC and check the patient’s benefits and payer policy. |
| CARC 97 | Service is included in payment for another service | Review bundling rules and coding edits before changing modifiers. |
| CARC 109 | Claim was sent to the wrong payer | Verify coverage and submit to the correct payer. |
| CARC 119 | Benefit maximum has been reached | Verify the plan limit and benefit usage. |
| CARC 151 | Submitted information does not support the number or frequency of services | Check units, frequency rules, and documentation. |
| CARC 167 | Diagnosis is not covered | Check the coverage policy and whether the diagnosis was coded correctly. |
| CARC 197 | Required prior authorization or notification was absent | Check the authorization record and payer’s correction or appeal rules. |
How to Fix the Most Common Medical Billing Denial Codes
CARC 16: Missing Information or Billing Error
CARC 16 means the claim lacks information or contains a submission or billing error. A RARC should be sent with this code to give more detail. Start with the RARC instead of guessing what is missing.
Check items such as provider information, claim fields, coding data, required identifiers, and other information named by the payer. Correct the actual error and follow the payer’s corrected-claim process.
CARC 18: Duplicate Claim or Service
CARC 18 means the payer identified an exact duplicate. Before resubmitting, search the billing system and payer portal for the original claim. It may already be paid, pending, or processed.
Repeatedly sending the same claim can create more duplicate activity. X12 states that CARC 18 normally uses the OA group code, except where certain workers’ compensation rules require CO.
CARC 22: Another Payer May Be Responsible
CARC 22 points to coordination of benefits. The payer believes another insurer may need to process the claim first. Confirm the patient’s primary and secondary insurance for the date of service.
If the payer order was wrong, update the patient’s insurance record and send the claim to the correct primary payer. Secondary claims may also require information from the primary payer’s adjudication.
CARC 27: Coverage Ended Before the Service
CARC 27 means the expense occurred after the patient’s coverage ended. Verify eligibility for the exact date of service. Check whether the insurance information was outdated or whether another plan was active.
Front-desk eligibility checks can help prevent this type of denial before the patient is seen.
CARC 29: Timely Filing Limit Expired
CARC 29 means the payer says the claim arrived after its filing deadline. First, check the payer contract and plan-specific filing rule. Then look for clearinghouse reports, payer acceptance records, or other proof showing when the original claim was sent.
Medicare fee-for-service generally requires claims to be filed within 12 months, or one calendar year, from the date of service, although limited exceptions exist. Commercial and Medicaid deadlines can differ, so practices should track each payer separately.
CARC 45: Charge Above the Allowed Amount
CARC 45 is often an adjustment rather than a true denied claim. It means the charge exceeded the fee schedule, maximum allowable amount, or contracted rate.
Compare the allowed amount with the payer contract. If the payer processed the claim correctly, post the adjustment according to the contract. If the payer used the wrong rate, investigate the underpayment instead of automatically writing it off.
CARC 50: Medical Necessity
CARC 50 means the payer did not consider the service medically necessary under its coverage rules. Review the payer policy, diagnosis, procedure, documentation, and any applicable coverage criteria.
If the record supports coverage, follow the payer’s appeal process and provide the required clinical documentation. Never change a diagnosis simply to make a claim pay.
CARC 96: Non-Covered Charge
CARC 96 means the payer considers the charge non-covered. The accompanying RARC can be important because it may explain why. Check the patient’s benefits, payer policy, service code, and coverage terms.
If the service is truly excluded, follow the payer contract and applicable patient responsibility rules rather than automatically moving the balance to the patient.
CARC 97: Service Bundled Into Another Payment
CARC 97 means the payer considers the service included in the payment for another procedure or service. Check the billed code combination and the payer’s bundling rules.
For Medicare, National Correct Coding Initiative procedure-to-procedure edits can prevent separate payment for certain code combinations. A modifier should only be used when the clinical facts and coding rules support it.
If recurring bundling issues are appearing across your claims, a medical coding audit can help identify coding and documentation patterns before claims are submitted.
CARC 109: Claim Sent to the Wrong Payer
CARC 109 means the payer says it is not responsible for the claim. Verify the patient’s coverage, plan type, payer ID, and coordination of benefits. Then route the claim to the correct payer.
Eligibility checks before service can reduce wrong-payer claims and prevent avoidable rework.
CARC 119: Benefit Maximum Reached
CARC 119 means the benefit maximum for the applicable period or occurrence has been reached. Check the plan’s benefit limit and the patient’s accumulated usage.
Do not assume the payer’s total is correct. Compare it with prior claims when needed and follow the plan’s rules for any valid patient responsibility.
CARC 151: Frequency of Services Not Supported
CARC 151 means the payer does not believe the submitted information supports the number or frequency of services billed. Check units, dates, frequency limits, prior claims, and clinical records.
If the frequency was medically supported, follow the payer’s review or appeal process with the documentation required by the plan.
CARC 167: Diagnosis Not Covered
CARC 167 means the diagnosis submitted is not covered for the service. Review the medical record, ICD-10-CM coding, payer coverage policy, and date of service.
The diagnosis must reflect the patient’s documented condition. Do not replace a valid diagnosis with another code only to obtain payment.
Practices should also keep diagnosis coding current. See Physician Cure’s 2027 ICD-10-CM update for upcoming diagnosis code changes.
CARC 197: Prior Authorization Was Missing
CARC 197 means required precertification, authorization, notification, or pretreatment approval was absent. First check whether authorization was actually obtained and whether the correct information was linked to the claim.
If authorization was not obtained, review the payer’s policy for retroactive authorization, reconsideration, or appeal. Rules vary by payer and service.
Prior authorization requirements are also changing across parts of the healthcare system. Practices can review the latest CMS prior authorization updates to prepare their workflows.
Are PR-1, PR-2 and PR-3 Denial Codes?
Not in the usual sense. PR-1 represents a deductible, PR-2 represents coinsurance, and PR-3 represents a copayment. These amounts are commonly patient responsibility when the remittance and plan rules support them.
This is one reason a list of denial codes in medical billing should not treat every adjustment as an unpaid claim that needs an appeal.
Medical Billing Denial Codes and Solutions: A Simple Workflow
- Read the full remittance. Review the group code, CARC, RARC, paid amount, allowed amount, and service line.
- Identify the real root cause. Decide whether the issue involves data, coding, eligibility, coverage, authorization, documentation, payer order, or filing.
- Choose the right action. The answer may be a corrected claim, appeal, contractual adjustment, patient balance, or submission to another payer.
- Watch the deadline. Corrections and appeals may have strict payer time limits.
- Track the pattern. Repeated denial codes should become workflow problems to fix, not claims to work one at a time forever.
How to Prevent Common Denial Codes in Medical Billing
Denial prevention starts before claim submission. Verify coverage and benefits before service. Keep provider enrollment information current. Review coding and modifiers. Confirm prior authorization. Check claim data before submission. Then monitor payer responses and aging reports after claims leave the practice.
Credentialing can also affect whether a payer accepts or pays a claim correctly. Physician Cure’s provider enrollment and credentialing services focus on payer enrollment, provider information, renewals, and related workflows.
For coding-related patterns, Physician Cure also provides medical coding audit services that review documentation, historical claims, and recurring denial causes.
When Should a Practice Get Help With Denial Management?
A few isolated denials may be handled internally. A larger problem exists when the same codes appear every week, accounts receivable keeps aging, staff cannot keep up with appeals, or the practice cannot identify why claims are failing.
The goal should not be to resubmit every denial. It should be to understand the cause, recover valid reimbursement where appropriate, and stop the same issue from returning.
Physician Cure provides medical billing and coding services that cover claim submission, follow-up, denial handling, appeals, coding, and revenue cycle support for medical practices.
Common Denial Codes in Medical Billing: Final Takeaway
The most useful way to manage common denial codes in medical billing is to treat each code as the start of an investigation, not the full answer. Read the group code, CARC, RARC, payer policy, original claim, and clinical record before deciding whether to correct, appeal, adjust, or route the claim elsewhere.
If repeat denials are taking time away from your staff or creating a growing accounts receivable backlog, Physician Cure can review your billing workflow and help identify where claims are breaking down.
Book a Free Consultation with Physician Cure
Frequently Asked Questions About Medical Billing Denial Codes
What are the most common denial codes in medical billing?
Common codes include CARC 16 for missing or incorrect claim information, 18 for duplicate services, 29 for timely filing, 50 for medical necessity, 96 for non-covered charges, 97 for bundled services, 109 for the wrong payer, and 197 for missing prior authorization. The codes a practice sees most often will vary by payer, specialty, and billing workflow.
What does CO mean in medical billing?
CO means Contractual Obligation. It is a Claim Adjustment Group Code that generally assigns the adjustment to the provider side of the payer arrangement. Always review the full remittance before deciding how to post the balance.
What is the difference between a CARC and a RARC?
A CARC explains the main reason a claim or service was adjusted. A RARC gives added information about that adjustment or about remittance processing. Some CARCs, including CARC 16, require an additional remark code.
What is CO-16 denial code?
CARC 16 means a claim or service is missing information or contains a submission or billing error. Read the accompanying RARC to find the specific problem, correct the claim, and follow the payer’s correction process.
What is CO-97 denial code?
CARC 97 means the payer considers a service included in the payment for another service or procedure. Review bundling rules, coding edits, documentation, and modifier requirements before changing the claim.
What does denial code 197 mean?
CARC 197 means required precertification, authorization, notification, or pretreatment approval was absent. Check whether an authorization exists and then follow the payer’s corrected-claim, retroactive authorization, or appeal rules.
Can all medical billing denials be appealed?
No. Some claims need a correction rather than an appeal. Others are valid contractual adjustments or patient responsibility amounts. The correct response depends on the group code, CARC, RARC, payer policy, contract, and claim details.
How can medical practices reduce claim denials?
Verify eligibility before service, keep credentialing information current, confirm prior authorization, use accurate coding and modifiers, submit claims on time, review remittance codes, and track recurring denial causes by payer and service.
