Use CARC and RARC to Improve Your Revenue Cycle

Use CARC and RARC to Improve Your Revenue Cycle

Learn how to speak the same language as your payer.

Every part of the revenue cycle has an impact on reimbursement, as well as on each other. For example, it’s important for the person making the appointment to confirm whether authorization is necessary before services are rendered because the lack of authorization information at the time of claim submission will negatively impact claim processing. You can find such inefficiencies in your revenue cycle, but you must speak your payer’s language.

Case in Point

Several years ago, I worked on a project to improve the payment posting process that would, in turn, improve the efficiency of the accounts receivable (A/R) follow-up team. This project took 18 months from start to implementation. The bulk of the project required studying all of the claim adjustment reason codes (CARCs) and remittance advice remark codes (RARCs) utilized by payers on the explanation of benefits (EOBs) and electronic remittance advice (ERA). Implementing a comprehensive list of the codes used by manual and automatic posting had an immediate positive impact on the revenue cycle.

Get to Know CARCs and RARCs

Payers use CARCs and RARCs to communicate to the provider why they processed a claim as they did (some payers have their own EOB “language,” such as Medicaid). These codes are often referred to as “denial” codes, but this is not an entirely accurate label. A large portion of the CARCs list does explain zero payments; however, there are many more codes that tell what adjustments should be applied and the purpose of the remaining balance.

Example:

RARC MA68 Alert: We did not crossover this claim because the secondary insurance information on the claim was incomplete. Please supply complete information or use the PLANID of the insurer to assure correct and timely routing of the claim

This communicates to the provider that the payer did not crossover the claim to the secondary insurance.

Example:

MA18 Alert: The claim information is also being forwarded to the patient’s supplemental insurer. Send any questions regarding supplemental benefits to them

This communicates that the claim information was crossed over to the supplemental insurer.

Use CARCs and RARCs as Intended

There is so much communicated through CARCs and RARCs. Work with the revenue cycle decision-makers on your team to complete a comprehensive review of these code lists, and use them as intended: to improve the efficiency and effectiveness of your revenue cycle. When the messages in these codes are translated correctly, you’ll see less claims sitting in the queue for follow-up and more immediate revenue flow.


Resource

CPB : Online Medical Billing Course

A complete list of CARC and RARC codes can be found on the Washington Publishing Company website.

Vanessa Moldovan, CPC, CPMA, CPPM

Vanessa L. Moldovan, CPC, CPMA, CPPM, is a revenue cycle expert at Medic Management, LLC. Her focus for more than 17 years has been on education and the physician revenue cycle. Moldovan holds a Bachelor of Arts degree in Healthcare Administration from Ashford University. She has worked as a revenue cycle as-sessor, a revenue cycle manager, an executive account manager, and a consultant. Moldovan is the NAB’s Region 5 representative. She has been serving as a Des Plaines, Illinois, local chapter officer since 2013; she served as president from 2014-2017, and is 2018 educational officer.

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