What are Remittance Advice Remark Codes (RARC) in Medical Billing and How do they work?

Rarc codes
Medical billing is an important process in the healthcare industry. It involves the submission and processing of medical claims to insurance companies to receive payment for services rendered to patients. However, the process can be complex and confusing, especially when it comes to remittance advice remark codes (RARC). In this article, we will discuss what RARC codes are, how they work, and provide a comprehensive remittance advice remark codes list. 

What are Remittance Advice Remark Codes (RARC) in Medical Billing?

RARC codes are standard codes that are used in medical billing to communicate payment-related information to healthcare providers and medical billers. These codes are used in the Remittance Advice (RA), which is a document that provides detailed information about the payment or denial of a medical claim. RARC codes are typically used to communicate additional information about claim denials, rejections, and adjustments that cannot be conveyed through other standard codes, such as Claim Adjustment Reason Codes (CARC) or Group Codes.

The Importance of RARC Codes in Medical Billing

RARC codes are an essential component of the medical billing process. They provide healthcare providers with valuable information about the status of their claims, including payment adjustments and denials. Understanding RARC codes is crucial for healthcare providers and medical billers to ensure accurate reimbursement and avoid claim processing delays. Without RARC codes, providers would not have a clear understanding of why their claims were adjusted or denied, making it difficult to address and correct the issues.

What is the explanation of benefits (EOB)?

RARC codes are used in conjunction with explanation of benefits (EOB) forms that insurance companies provide to healthcare providers. The EOB form lists the services rendered, the amount billed, and the amount paid by the insurance company. If a claim is adjusted or denied, the EOB form will also include a RARC code that explains the reason for the adjustment or denial.

How Do Remittance Advice Remark Codes (RARC) Work in medical billing

RARC codes function by supplying extra details regarding payment-related concerns that are not possible to express using other standard codes. A RARC code, for instance, might be used to explain further the reasons a claim was rejected, such as “denial due to lack of medical necessity” or “denial due to duplicate billing.” Additionally, claim adjustments might be described using RARC codes, for example, “payment adjusted due to partial payment received from another insurer.” RARC codes are typically included in the Remittance Advice (RA), which is sent by the insurance company or payer to the healthcare provider or medical biller. The RA contains detailed information about each claim, including payment or denial information, and any additional information provided through RARC codes. Healthcare providers and medical billers can use this information to understand the reason for claim denials, rejections, or adjustments and take appropriate action to address any issues. 

Common RARC Codes and their Meanings

There are hundreds of RARC codes, each with its unique meaning. However, some of the most common RARC codes include:


Consult plan benefit documents/guidelines for information about restrictions for this service.This code indicates that the insurance company has restrictions on the service in question, and the healthcare provider should review the plan’s benefit documents or guidelines to determine the limitations.


 Missing/incomplete/invalid certification or authorization.This code indicates that the healthcare provider did not provide proper certification or authorization for the service in question.


 Not covered when performed during the same session/date as a previously processed service for the patient.This code indicates that the insurance company will not cover a service that was performed on the same day as another service that was already processed for the patient.


 Payment adjusted based on the submitted documentation.This code indicates that the insurance company adjusted the payment based on the documentation submitted by the healthcare provider.


Payment for this service is included in the payment/allowance for another service/procedure that has already been adjudicated.This code indicates that the payment for the service in question is already included in the payment for another service or procedure that has already been processed.


 This code indicates that the claim was denied because the procedure was experimental or investigational.


This code indicates that the claim was denied because the patient has exceeded their maximum benefit for the service or treatment.


 This code indicates that the claim was adjusted because the procedure was performed by a non-participating provider.


 This code indicates that the claim was adjusted because the service was not medically necessary.


 This code indicates that the claim was adjusted because the service was not covered under the patient’s plan 

Benefits of Using RARC Codes

The use of RARC codes provides several benefits to healthcare providers.
  • They help to identify and address billing issues quickly, reducing the likelihood of delayed or denied claims.
  • They improve communication between providers and insurance companies, ensuring that everyone is on the same page regarding claim status and payment adjustments.
  • They help providers to identify trends in payment adjustments and denials, allowing them to make improvements to their billing processes.

The Role of RARC Codes in Denial Management

RARC codes are a critical component of denial management in medical billing. They provide healthcare providers with the information they need to understand why a claim was denied and take steps to correct the issue. Providers can use this information to appeal denied claims, identify trends in denials, and make improvements to their billing processes to reduce the likelihood of future denials.

Tips for Accurate and Effective Use of RARC Codes

To use RARC codes effectively, healthcare providers should follow these tips:
  • Familiarize yourself with the RARC codes and their meanings.
  • Use RARC codes in conjunction with other billing codes, such as procedure codes and diagnosis codes, to provide a complete picture of the claim.
  • Be sure to include all necessary documentation with the claim to support the services rendered.
  • Double-check that the RARC code used accurately reflects the reason for the adjustment or denial.
  • Follow up on denied or rejected claims promptly to avoid delays in payment.

 Why choose Zee Medical Billing? 

ZEE Medical Billing is aware of the value of precise and effective medical billing procedures. Due to the complexity of RARC codes, it offers complete solutions to assist medical billing specialists and healthcare practitioners. They provide several services, such as RARC code analysis, training, and consultancy, to assist you in streamlining your billing procedure and boosting your revenue. To discover more about how we can help you improve your billing process and increase your revenue, get in touch with us right away.  

Get in Touch

More from the category