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Medical Billing Glossary

CARC & RARC Codes

The reason and remark codes that explain every adjustment on a remittance.

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Definition

Claim Adjustment Reason Codes (CARCs) explain why a payment differs from the billed amount — why an amount was reduced, adjusted, or not paid. Remittance Advice Remark Codes (RARCs) add supplemental detail to a CARC.

These codes appear on the ERA/EOB for each adjusted line. Reading them is how billing staff know whether an adjustment was a contractual write-off, a patient-responsibility amount, or a denial that should be worked or appealed.

Why it matters for billing

CARC/RARC codes are the roadmap for denial management. Grouping denials by reason code shows exactly where revenue is leaking and which fixes belong upstream. Misreading them — writing off a workable denial as a contractual adjustment — quietly loses money.

Related terms

Terms that come up alongside CARC & RARC Codes in the revenue cycle.

Billing that gets CARC & RARC Codes right

EnVisionMD RCM handles eligibility, coding, documentation, denials and follow-up end to end — so the details behind terms like this one are managed for you, not left to chance.

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CARC & RARC Codes — frequently asked questions

What is the difference between a CARC and a RARC?

A CARC states the reason for an adjustment; a RARC provides additional explanatory detail that supports the CARC.

Where do these codes appear?

On the electronic remittance advice (ERA/835) and the EOB, attached to each adjusted claim line.

Authoritative References

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