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Denial Code Reference

Common Claim Denial Codes, Explained for Billing Teams

A denial code tells you why a payer did not pay a claim as billed. It does not tell you what to do next. This reference covers the denials billing teams see most often, with the usual root causes, a step-by-step workflow for each, and how to stop it recurring.

Each entry is written from the working side of the revenue cycle: what the denial really means, whether to correct, appeal, or adjust, and who on your team should own the fix.

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Descriptions are plain-English summaries. The official CARC and RARC lists are maintained by X12.

How to read a denial

A denial on an 835 or EOB has three parts: a group code (CO, PR, OA, or PI) that says who is financially responsible, a Claim Adjustment Reason Code (CARC) that says why the payment was adjusted, and often one or more Remittance Advice Remark Codes (RARCs) that add detail. CO-197, for example, means the provider is responsible (CO) because authorization was missing (CARC 197). Start with the CARC to understand the reason, read the RARC for specifics, and use the group code to decide whether any balance can go to the patient.

Eligibility & coverage

Eligibility & coverage denials.

Authorization

Authorization denials.

Coding

Coding denials.

Medical necessity

Medical necessity denials.

Claim data & filing

Claim data & filing denials.

Payment & contract

Payment & contract denials.

Group Codes

Who is responsible for the balance.

The same reason code can appear with different group codes. The group code decides where the balance goes.

CO: Contractual Obligation
The adjustment is the provider's responsibility under the payer contract or regulation. For in-network claims, the patient generally cannot be billed for a CO amount.
PR: Patient Responsibility
The amount may be billed to the patient, such as deductible, coinsurance, copay, or a non-covered service the patient agreed to pay for.
OA: Other Adjustment
Used when neither CO nor PR applies, often for coordination of benefits and duplicate-claim situations.
PI: Payer Initiated Reduction
The payer reduced payment for a reason it believes the patient is not responsible for, but that is not a contractual obligation either.
FAQ

Questions about denial codes.

What is the difference between a CARC and a RARC?
A Claim Adjustment Reason Code (CARC) explains why a claim or line was paid differently than billed. A Remittance Advice Remark Code (RARC) adds detail to the CARC. Some CARCs, such as 16 and 96, are too general to act on without the RARC that accompanies them.
What do CO, PR, OA, and PI mean in front of a denial code?
They are group codes that assign financial responsibility. CO is a contractual obligation the provider absorbs, PR is patient responsibility, OA is another adjustment, and PI is a payer-initiated reduction. The same CARC can appear with different group codes on different claims.
Where are the official denial code descriptions published?
The CARC and RARC code lists are maintained by X12 and updated several times a year. This reference explains the most common codes in plain English. It does not replace the official lists or your payer's own policies.
Should every denial be appealed?
No. Many denials, such as missing information, modifier errors, and demographic mismatches, are fixed faster with a corrected claim or a new claim. Appeals are for cases where the claim was right and the payer's decision was wrong, or where documentation can show that coverage criteria were met.

Want to know what denials are costing you? Try the denial cost calculator →

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