Health care payment and remittance advice
After Medicare processes a claim, either an Electronic Remittance Advice (ERA) or a Standard Paper Remittance (SPR) is sent with final claim adjudication and payment information. One ERA or SPR usually includes adjudication decisions about multiple claims. Itemized information is reported within that ERA or SPR for each claim and/or line to enable the provider to associate the adjudication decisions with those claims/lines as submitted by the provider.
The ERA or SPR reports the reason for each adjustment, and the value of each adjustment. Adjustments can happen at line, claim or provider level. In case of ERA the adjustment reasons are reported through standard codes. For any line or claim level adjustment, three sets of codes may be used.
- Group code
- Claim adjustment reason code
- Remittance advice remark code
Group codes identify the financially responsible party, or the general category of payment adjustment group codes must always be used in conjunction with a claim adjustment reason code (CARC)
Claim adjustment reason codes (CARC) communicate an adjustment, meaning that they must communicate why a claim or service line was paid differently than it was billed, and may be supplemented by more specific explanation using remittance advice remark codes. If there is no adjustment to a claim/line, then there is no adjustment reason code. Follow this link to a complete list of claim adjustment reason codes. https://x12.org/codes/claim-adjustment-reason-codes
Remittance advice remark codes (RARC) are used to provide additional explanation for an adjustment already described by a claim adjustment reason code (CARC) or to convey information about remittance processing. Each RARC identifies a specific message as shown in the remittance advice remark code list. There are two types of RARCs, supplemental and informational. The remittance advice remark code list is updated tri-annually in March, July, and November. Follow this link to a complete list of remittance advice remark codes. https://x12.org/codes/remittance-advice-remark-codes