Which codes provide reasons for denied or rejected claims?

The selected answer, which pertains to Claims Adjustment Reason Codes (CARC), provides specific information regarding the reasons for denied or rejected claims. CARCs are standardized codes that identify the rationale for payment adjustments, denials, or rejections made by payers. Understanding these codes is crucial for healthcare providers and revenue cycle management professionals, as they allow for the identification of patterns in claim denials, informing strategies for improving claim submissions and reducing future denials.

CARCs are designed to help organizations understand the reasons behind each claim's payment status, ensuring they can address any issues effectively. This might involve correcting billing errors, addressing insufficient documentation, or re-evaluating the medical necessity of the service provided.

Other options, such as Remittance Advice Remark Codes (RARC), serve a different purpose. While RARCs accompany CARCs and provide additional clarification or context about the adjustment reasons, they do not specifically identify the reasons for claim denials. Closed Claims Codes and Consumer Credit Protection Acts are unrelated to the specific context of claims adjustments and denials, making them less relevant in understanding the reasons behind denied or rejected claims.