What is a claim adjustment reason code (CARC)?
A claim adjustment reason code (CARC) is a standard code on a remittance that explains why a payer paid a claim line differently from what was billed.
Each adjustment on an 835 pairs a CARC with a group code: CO (contractual obligation, written off by the provider), PR (patient responsibility, billed to the patient) or OA (other adjustment). For example, CARC 45 means the charge exceeds the fee schedule or contracted amount, CARC 97 means the service is included in another service, and CARC 29 means the time limit for filing has expired.
Reading CARCs line by line is how billing teams tell normal contractual write-offs apart from adjustments that should be challenged.
How Vareo helps
Vareo checks every line of your 835 remittances against your payer contracts, finds underpayments like this, and handles the appeals and follow-up. You pay only a share of what is recovered.
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Last updated October 11, 2026