What is the appropriate Claim Adjustment Reason Code (CARC) that Medicare Supplement Plans should use on their 835s for lines that are adjusted by the primary (Medicare) because Medicare is bundling/packaging the service into the primary Ambulatory Payment Classification (APC) payment?
Medicare assigns CARC CO-97 to the packaged service lines. A Medicare supplement plan, acting as a secondary payer, is currently using CARC CO-96 on these unpaid lines indicating that these are non-covered services by Medicare because it did not pay separately. We tried to explain to the secondary payer that a service that is packaged is not the same as a service that is non-covered. We believe CARC OA-23 may be more appropriate in this scenario, as its description indicates "The impact of prior payer(s) adjudication including payments and/or adjustments." We believe that CO-96 should only be used by secondary payers when their policies truly do not cover a service, but if they are simply following suit on what Medicare did, should they be using OA-23 instead?
If the secondary payer’s intent is that the service is not covered based on their benefit/adjudication, then CARC 96 with an appropriate Remittance Advice Remark Code (RARC) would be acceptable. However, in the example provided, the understanding is that the secondary payer does not have any amounts they are considering for payment based on how the prior payer reported that line. Using CARC 23 would apply here for prior payer payment and contractual reductions that the secondary payer is not considering for payment.
Please note that the term "impact" in that description and within Section 1.10.2.13 of the 835 TR3 is to be used to identify the payments and contractual reductions that have already been posted to the accounts receivable by the provider. This even applies when the secondary payer does not consider what a prior payer actually adjudicated.