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CMS updates claims codes for workers comp

CMS is focusing on workers compensation payments in its latest round of changes to the list of Claim Adjustment Reason Codes (CARCs) and Remittance Advice Remark Codes (RARCs) that are sent to you from payers. A total of three new CARCs and RARCs are being added, while seven are being modified.

You will start seeing the new codes appearing on affected claims in April, when the changes are implemented, according to Transmittal 2131 to the Medicare Claims Processing Manual, released Jan. 7.

Here's a brief rundown on the new codes:
  • W2 (CARC). Signifies that your payment was reduced, or even denied, because of workers compensation policies.
  • N540 (RARC). Payment adjusted based on the interrupted stay policy (patient was discharged from inpatient status but returns prior to midnight on third consecutive day).
  • N541 (RARC). Mismatch between the submitted insurance type code and the information stored in payer system.
The modified CARC codes all pertain to workers compensation, and are used to indicate limits for payments. Here's the list:
  • 191 (CARC). Injury or illness wasn't work-related and is thus not covered.
  • 214 (CARC). Claim was adjudicated as non-payable and thus payer is not liable for claim or service/treatment.
  • 218 (CARC). Payment based on entitlement to benefits.
  • 219 (CARC). Payment based on extent of injury.
  • 221 (CARC). The claim is being investigated by payer.
  • W1 (CARC). The payment is being adjusted to reflect changes in the Workers Compensation State Fee Schedule.
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