CO-102: Major Medical Adjustment

What Does CO-102 Mean?

With CO (Contractual Obligation), the CARC 102 adjustment for major medical adjustment is a contractual reduction. The provider absorbs this amount per the payer contract or regulatory payment methodology. The patient is not responsible for the adjusted amount. Review the remittance to confirm the adjustment is consistent with your contract terms.

CARC 102 means the payer adjusted the payment based on major medical adjustment. The reimbursement was calculated using the payer's fee schedule, contracted rate, or regulatory payment methodology rather than the billed charge.

Common scenarios that trigger this adjustment include: the patient's major medical benefit has a specific allowance or calculation methodology, and CARC 102 reflects the adjustment between billed charges and the major medical allowed amount; The major medical portion of the plan applies its own deductible and coinsurance schedule, which differs from the basic medical benefit, resulting in an adjustment; The service is classified under the major medical benefit rather than basic medical coverage, resulting in different payment rules and a corresponding adjustment. The group code paired with CARC 102 determines who bears the financial responsibility — CO places it on the provider as a contractual obligation, PR shifts it to the patient, OA indicates a coordination of benefits or other payer adjustment.

Common Causes

How to Resolve

1. Review the adjustment against contract terms Compare the CO-102 adjustment with your payer contract to confirm the reduction is consistent with agreed terms or regulatory methodology.
2. Verify the adjustment amount Confirm the dollar amount of the adjustment is calculated correctly based on the contracted rate and the service provided.
3. Appeal if the adjustment is incorrect Appeal if you believe the service was classified under the wrong benefit tier or the major medical allowance was calculated incorrectly. Include the patient's benefit plan details, the applicable fee schedule, and evidence of the correct benefit tier for the service.
4. Process the contractual adjustment If the adjustment is correct per contract terms, process it accordingly in your billing system. This amount cannot be transferred to the patient.

Common RARC Pairings

The RARC code tells you exactly what triggered the CO-102:

How to Prevent CO-102

• Verify the patient's benefit tier (basic vs. major medical) for each service before submission
• Understand payer-specific major medical benefit structures and allowance calculations
• Train billing staff on the differences between basic and major medical benefit tiers
• Use eligibility verification tools to confirm which benefit tier applies to the planned services

Also Filed As

The same CARC 102 may appear with different Group Codes:

Related Denial Codes