Understanding CARC and RARC

A Claim Adjustment Reason Code (CARC) is a code used in medical billing to communicate a change or an adjustment in payment. CARCs have to be used to communicate why there was a difference between the amount paid in a claim or service line and the amount that was billed against it. CARCS are to be mentioned only if there is an adjustment of this kind. If there is no adjustment to a claim or service line, then there is no need to use a CARC.

Further to the CARC is the RARC, or the Remittance Advice Remark Code, which is used for providing extra explanation and information about CARCs when they have already been used. This additional information usually relates to information regarding remittance processing.

Understanding RARCs further

To explain RARCs further, RARCs are of two types: Supplemental and informational. Most RARCs are supplemental, since they are merely needed to explain an adjustment already done by CARCs. Informational RARCs, on the other hand, are in the form of alerts, because of which they come with the red lettered, bolded word “Alert”. These alerts are of a general nature and are used to convey important information about the processing of the remittance, and are not related to a specific RARC adjustment.

Because of the nature of these two codes, it is necessary for healthcare providers to get a thorough understanding of the way they work. If there is a claim denial because of lack of proper understanding and application of the codes; it results in nonpayment, which affects the cash flow. Stifling of this cash flow can in turn affect the players in the healthcare industry, especially the smaller ones. Additional resources will be required to set the claim denials right. When there is a delay in setting the claim denials right; precious time may be lost to the extent that the healthcare provider may lose the chance to go on appeal. This will result in permanent denial of the claim.

Getting RARCs and CARCs right is essential to avoid problems in billing

The solution to avoiding such situations is to arm oneself with full and clear knowledge of the way RARCs and CARCs work and to learn how to identify denials and get a grasp of the impact of RARCs and CARCs on denials.

This is the content of a webinar that is being organized by MentorHealth, a leading provider of professional trainings for the healthcare industry. At this session, Gail Madison Brown, a registered nurse and an attorney with over 25 years of experience in healthcare, will be the speaker. To get proper insights into how CARCs and RARCs work, and to understand the ways of avoiding the costly impacts of their improper use; Read More : http://www.mentorhealth.com/control/w_product/~product_id=800966LIV...

The core aim of this webinar is to help participants learn how to identify denials, understand the codes which affect their denials, and to ultimately help them to establish effective and efficient processes for managing, monitoring and preventing denials. Compliance, Audit, Billing, Coding and Operations professionals will find this course highly useful and valuable.

Gail will cover the following areas at this webinar on RARCs and CARCs: