Provider Alert! Health Insurance Portability and Accountability Act (HIPAA) Compliant Reasons for Denials and Adjustments

Attention:  All Providers
Health Insurance Portability and Accountability Act (HIPAA) Compliant Reasons for Denials and Adjustments

Beginning May 15, 2019, Texas Children’s Health Plan (TCHP) providers will see positive changes to their HIPAA standard 835 electronic remittance and paper explanations of payments (EOPs). TCHP will be providing more robust and HIPAA compliant messages by utilizing national standard claim adjustment reason codes (CARCs) and remittance advice remark codes (RARCs).

What are CARCs and RARCs?

CARCs and RARCs are industry standard code sets used to explain payment adjustments in remittance advice transactions.

• CARCs communicate a reason for a payment adjustment that describes why a claim or service line was paid differently than it was billed.
• RARCs are used to provide additional explanation for an adjustment already described by a CARC or to convey information about remittance processing.

Benefits of CARC and RARC codes

CARC and RARC enhancements benefit TCHP providers by:

• Promoting consistency in reporting adjustment and remittance advice with national standards.
• Providing additional claims disposition transparency.
• Simplifying reasons for administrative staff during the payment posting and reconciliation processes.

Standardized descriptions for HIPAA compliant CARCs and RARCs can be accessed on the Washington Publishing Company’s website at http://www.wpc-edi.com/codes.

TCHP Provider Portal 835 Remittance Advice Report Future Update

TCHP Provider Portal, X12-835 Remittance Advise Reports will not display all CARC and RARC reasons on May 15, 2019. The remit messages that currently display on this report will continue until a future date has been determined. TCHP will send an additional communication when this enhancement is set to occur.

If you have any questions regarding these codes, please contact our Texas Children’s Health Plan Customer Service department at 832-828-1004 or toll-free at 1-877-213-5508.

Provider Network Management
Texas Children’s Health Plan