Federal Guidance Standardizes IDR Eligibility Codes

In accordance with the independent dispute resolution (IDR) final rule published by the U.S. Department of the Treasury, the Department of Labor, the Department of Health and Human Services (the Departments), and the Office of Personnel Management (OPM) in May, the Center for Consumer Information and Insurance Oversight (CCIIO) published guidance regarding the use of claim adjustment reason codes (CARCs) and remittance advice remark codes (RARCs) July 17. CARCs explain why a claim or service line was paid differently from how it was billed, and RARCs provide additional explanation for the payment.

The guidance outlines nine standardized RARCs that will improve communication between payers and providers of information used to determine whether a payment dispute is eligible for the Federal IDR process. Plans and issuers may continue to use the CARC they deem most appropriate for any claim adjustment. Payers will be required to include CARCs and RARCs on all applicable payments for services provided on or after Jan. 1, 2027.

If you have questions or for more information, contact Katie Keysor, ACR Senior Director of Economic Policy.