Q&A: Determining the meaning of RARCs

Q: What is the difference between the two types of Remittance Advice Remark Codes (RARC)?

A: RARCs are alphanumeric codes that are used to further explain an adjustment to a payment made and contain additional information that is not indicated by a CARC. These codes began as a proprietary list created and supported for Medicare use. Later, the list was mentioned in HIPAA rules. After that, the list became an industry standard and can now be used by any health insurance plan.

There are two types of RARCs: supplemental and informational. The majority of RARCs are supplemental. Informational RARCs are listed with “alert,” which is used to provide information about
remittance processing.

For example, a service denied with CARC 96 as service not covered could have a RARC like M1 (X-ray not taken within the past 12 months or near enough to start of treatment) or M2 (not paid separately when the patient is an inpatient) included in the RA.

CARCs will also have a start date and modified date with the same meaning as was explained for CARCs.

For more information, see The Contemporary Guide to Patient Financial Services.