Interpret CARC and RARC denial codes from an 835 ERA and route claims to the correct denial management queue

Steps

1. Extract CAS segments from each CLP loop in the 835; CAS01 is the claim adjustment group code (CO=contractual, PR=patient responsibility, OA=other adjustments, PI=payer initiated), CAS02 is the CARC (Claim Adjustment Reason Code), and CAS03 is the adjustment amount.
2. Download the current CARC and RARC code lists from the Washington Publishing Company (wpc-edi.com) — these lists are updated periodically and your routing rules must track the current code definitions.
3. Map each CARC to a denial category and responsible queue: e.g., CO-4 (service inconsistent with modifier) routes to coding review; CO-16 (claim lacks required information) routes to billing; CO-50 (non-covered service) routes to clinical review for potential appeal.
4. Check for associated RARC codes in the MOA or LQ segments (remittance advice remarks); RARCs provide supplemental explanation — use them to enrich the denial record and pre-populate appeal template fields.
5. For PR-group CARCs, generate a patient statement or balance bill rather than an internal denial work queue entry; confusing CO and PR codes causes incorrect write-offs or incorrect patient billing.
6. Build a feedback loop: when an appeal overturns a denial, record the original CARC, the appeal argument used, and the outcome to refine future routing rules and prioritize high-ROI appeal queues.