CARC 118 Active

CO-118: ESRD Network Support Adjustment

TL;DR

Contractual adjustment — review against your contract terms. The patient is not liable for this amount.

Action
Review & Decide
Who Pays
Provider
Appeal
No
Patient Impact
None
Disclaimer
This content is for informational purposes only and does not constitute professional billing advice. Always verify information against your payer contracts and current coding guidelines. Consult a certified billing specialist for specific claim issues.

What Does CO-118 Mean?

With CO (Contractual Obligation), the CARC 118 adjustment for esrd network support 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 118 means the payer adjusted the payment based on esrd network support 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: medicare deducts a per-treatment amount from ESRD facility payments to fund the ESRD Network Organizations that oversee quality of care for dialysis patients. CARC 118 reflects this standard deduction.; The per-treatment network support deduction rate was updated by CMS, and the new rate is reflected in the payment adjustment. The group code paired with CARC 118 determines who bears the financial responsibility — CO places it on the provider as a contractual obligation, OA indicates a coordination of benefits or other payer adjustment, PR shifts it to the patient.

Common Causes

Cause Frequency
Standard ESRD network organization fee deduction Medicare deducts a per-treatment amount from ESRD facility payments to fund the ESRD Network Organizations that oversee quality of care for dialysis patients. CARC 118 reflects this standard deduction. Most Common
ESRD network support rate change The per-treatment network support deduction rate was updated by CMS, and the new rate is reflected in the payment adjustment Common

How to Resolve

  1. Review the adjustment against contract terms Compare the CO-118 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. 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.
Do Not Appeal This Code

This is a standard CMS-mandated deduction to fund ESRD Network Organizations. It is not a denial and cannot be appealed. If the amount appears incorrect, contact the MAC for rate verification.

Common RARC Pairings

The RARC code tells you exactly what triggered the CO-118:

RARC Description
N381 This deduction reflects the ESRD network support amount per CMS requirements Verify the deduction matches the current CMS-published per-treatment rate →

How to Prevent CO-118

Also Filed As

The same CARC 118 may appear with different Group Codes:

OA-118 PR-118

Related Denial Codes

CO-24 — Charges Covered Under Capitation/Managed Care CO-44 — Prompt-Pay Discount CO-45 — Charge Exceeds Fee Schedule/Maximum Allowable CO-69 — Day Outlier Amount CO-70 — Cost Outlier Adjustment

Sources

  1. https://www.cms.gov/medicare/payment/fee-schedules/esrd-pps
  2. https://www.aapc.com/resources/claim-adjustment-reason-code-carc
  3. https://www.mdclarity.com/denial-code/118
  4. Codes maintained by X12. Visit x12.org for official definitions.