CARC 256: Service not payable per managed care contract.
The Medicare Advantage or Medicaid MCO plan's contract specifically excludes or doesn't cover this service.
CARC 256 appears on the 835 ERA (Electronic Remittance Advice) that the payer returns after claim adjudication. It explains a reduction, denial, or payment adjustment to your billing team. For your practice, the question is workflow: identify the pattern, route the denial to the right resolution path (rebill, appeal, write-off), and recover what's recoverable without burning RVU time on dead-end fights.
What CARC 256 means
The official X12 description is: “Service not payable per managed care contract.”
In plain language: The Medicare Advantage or Medicaid MCO plan's contract specifically excludes or doesn't cover this service.
Common scenarios
- MA plan denies what Original Medicare covers
- Medicaid MCO carve-out
- Out-of-network MA emergency
Practice workflow for CARC X 256
Appeal under MA grievance/appeal rights (42 CFR 422 Subpart M) or Medicaid MCO appeal process (42 CFR 438 Subpart F). Both require expedited timelines for urgent care.
ApprovalHelp auto-drafts the appeal letter against the right federal appeal-rights regulation (ACA §2719, ERISA §503, NSA §2799A, 42 CFR 422 Subpart M, or 42 CFR 438 Subpart F) for the patient's plan type, the payer's own coverage policy, and the relevant clinical guideline. Drafts route to the clinician for signature in under five minutes.
CARC 256 group codes explained
On the 835 ERA, CARC 256 appears alongside a group code that signals who is financially responsible for the adjustment. CO (Contractual Obligation) — Contractual write-off. The provider agreed to the rate. Patient does NOT owe this amount.
Frequently asked questions
What does CARC 256 mean?
Service not payable per managed care contract. In plain language: The Medicare Advantage or Medicaid MCO plan's contract specifically excludes or doesn't cover this service.
Is CARC 256 appealable?
Yes — CARC 256 is one of the codes that commonly supports an appeal. Appeal under MA grievance/appeal rights (42 CFR 422 Subpart M) or Medicaid MCO appeal process (42 CFR 438 Subpart F). Both require expedited timelines for urgent care.
Which group code does CARC 256 appear under?
CARC 256 most often appears under: CO (Contractual Obligation) — Contractual write-off. The provider agreed to the rate. Patient does NOT owe this amount.
When does CARC 256 typically appear on a denial?
Common scenarios: MA plan denies what Original Medicare covers; Medicaid MCO carve-out; Out-of-network MA emergency.
What's the practice workflow for a CARC 256 denial?
Appeal under MA grievance/appeal rights (42 CFR 422 Subpart M) or Medicaid MCO appeal process (42 CFR 438 Subpart F). Both require expedited timelines for urgent care.
Related resources
Sources
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