Saturday, July 7, 2007

Claim Adjustment Reason Codes and Remittance Advice Remark Codes

Medicare came up with a simpler way to bill secondary claims so that all insurance carriers can handle electronic claims without a paper EOB. In reality it is great to not have to print the primary EOB, Secondary claim and snail mail this to the carrier anymore but learning something new has become quite complex.

My
medical billing software came out with a nifty release so that my medical billers can handle attaching claim adjustment reason codes and remittance advice remark codes however; they didn't stress the importance of doing it correctly and well my billers did their best but came up short.

So a few months later and many secondary claim rejections I have identified that it would be best to research for myself why those my billers post are getting rejections while my electronic remittance advice (ERA) are getting paid out on. Currently I get my EOB's electronically for my top 10+ insurance carriers and I can review and approve the payments. My EOB also is archivable so I never have to print it and I have it on file forever in my software. The other benefit is when I use the ERA all of my claim adjustment reason codes and remittance advice remark codes are pre-populated so I don't need to waste time adding them.

What I don't like is that when I still get paper EOB's my billers have to attach these codes and if they don't get it right the first time the claim gets rejected when billing secondary insurance carriers electronically.

Medicare updates these codes 3x's a year and can inactivate a code and deny payment when a inactive code is used. I am not sure if my medical billing software is going to manage this part for me but I am definitely going to request this of them.

After some research I identified that all active codes can be found at
http://www.wpc-edi.com/codes and click on the Claim Adjustment Reason Codes and Remittance Advice Remark Codes. Get to know your codes including Group Codes, CARC's and RARC's because if you don't use these correctly you will get denial EOB's.

Group Codes: used to identify who is financially responsible for the amount that the payor is not reimbursing.
CARC's: used to explain why an amount of the claim is being adjusted
RARC's: used to give additional information about the adjustment codes

Group codes:
CO for contractual adjustment
PR for patient responsibility
OA Other Adjustment
CR Correction used with a reversal and correction

CARC Codes:
16 Claim/service lacks information which is needed for adjudication. Additional information is supplied using remittance advice remarks codes whenever appropriate. This change to be effective 4/1/2007: At least one Remark Code must be provided (may be comprised of either the Remittance Advice Remark Code or NCPDP Reject Reason Code.)

17 Payment adjusted because requested information was not provided or was insufficient/incomplete. Additional information is supplied using the remittance advice remarks codes whenever appropriate. This change to be effective 4/1/2007: At least one Remark Code must be provided (may be comprised of either the Remittance Advice Remark Code or NCPDP Reject Reason Code.)

96 Non-covered charge(s). This change to be effective 4/1/2007: At least one Remark Code must be provided (may be comprised of either the Remittance Advice Remark Code or NCPDP Reject Reason Code.)

125 Payment adjusted due to a submission/billing error(s). Additional information is supplied using the remittance advice remarks codes whenever appropriate. This change to be effective 4/1/2007: At least one Remark Code must be provided (may be comprised of either the Remittance Advice Remark Code or NCPDP Reject Reason Code.)

A1 Claim denied charges

204 This service/equipment/drug is not covered under the patient’s current benefit plan

RARC Code:
N130 Consult plan benefit documents for information about restrictions for this service

I hope this helps you as much as it has helped me and my billers.

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3 comments:

  1. Hi Jennifer. I was wondering if you can tell me where we should be placing these remittance remark codes on paper claims... We are a small practice and have the ASCA waiver on file with Medicare but have been struggling to get these MSP claims paid. We always attach our primary EOB, but we have denials for the remittance codes. Medicare can't seem to answer this simple question for us.
    THANK YOU in advance for any light you can shed.
    Karissa

    ReplyDelete
  2. Hi Karissa,

    Claim Adjustment Reasons codes are needed when you are sending the secondary claim electronically to the insurance carrier. This isn't used when sending the secondary claim by paper.

    As a side note I have a few follow up questions:

    1. Is this is a chiropractic office (kgchiro)?
    2. Are you using the correct modifiers when billing to Medicare?
    3. What denial codes are you getting back from Medicare?
    4. What software are you using? Can you transmit Secondary Claims electronically?

    You also mentioned you have been calling Medicare and they won't tell you what is required. Any information on the denial codes you have been getting will help me identify the true nature of the denials.

    I am happy to work with you on getting your secondary claims transmitting electronically. It will save your office time, you will receive a quicker turn around on your money and you won't have to spend $$ dropping the claim to paper, attaching the primary EOB and mailing.

    Also have you read my blog on chiropractic billing?
    http://askamedicalbiller.blogspot.com/2007/02/medical-billers-be-aware-medicare-will.html

    Let me know how I can help!!!
    Jennifer

    ReplyDelete
  3. Hi Karissa,

    I also thought of another possible reason why Medicare is denying the claim -

    When you are attaching the primary EOB does it have the Remark Codes on the EOB?

    As a reminder when sending paper claims with the primary EOB they need to include the Payment Reason Codes and any denial remark codes. If these codes are indicated on the last page of the EOB or the back of the EOB that information needs to be copied and attached to the secondary claim.

    In this case you may have to send 3pages to Medicare -
    1. CMS 1500 claim
    2. A legible Primary EOB with nothing highlighted
    3. Remark Code's page with Explanation for the denial

    Medicares OCR scanners do not copy front and back of the EOB so they need to be on seperate pages.

    Jennifer

    ReplyDelete