CARC 195 Active

CO-195: Refund to Erroneous Priority Payer

TL;DR

The payer priority correction is handled contractually. Redirect the claim to the correct primary payer.

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-195 Mean?

With CO (Contractual Obligation), the payer priority correction results in a contractual adjustment. The provider may need to redirect the claim to the correct payer. Review the COB order and submit accordingly.

CARC 195 appears when a coordination of benefits error is corrected. The claim was initially processed and paid by the wrong payer in the priority sequence — for example, Medicare paid as primary when another payer should have been primary, or the secondary payer was treated as the primary. This code reflects the adjustment made to correct the payment order.

This is common in Medicare Secondary Payer (MSP) situations where Medicare was incorrectly billed as the primary payer when another insurer (employer group health plan, auto insurance, workers compensation, etc.) should have paid first. It also occurs when retroactive coverage changes alter the payer priority order.

How to Resolve

  1. Verify the correct payer priority Confirm which payer should be primary.
  2. Submit to the correct payer File the claim with the appropriate primary payer.
  3. Appeal if priority was correct If the original order was right, appeal with enrollment and COB documentation.
Do Not Appeal This Code

Refund to Erroneous Priority Payer recorded under CO is a contractual obligation — the provider absorbs this amount per the payer agreement. Without an error in how the contract was applied, appeals don't apply. Review the accompanying RARC codes for context and accept the adjustment when the contract terms were applied correctly.

How to Prevent CO-195

Also Filed As

The same CARC 195 may appear with different Group Codes:

OA-195 PR-195

Related Denial Codes

CO-3 — Co-payment Amount CO-85 — Patient Interest Adjustment CO-100 — Payment Made to Patient/Insured CO-101 — Predetermination: Anticipated Payment CO-105 — Tax Withholding Amount

Sources

  1. https://www.mdclarity.com/denial-code-carcs
  2. https://x12.org/codes/claim-adjustment-reason-codes
  3. https://portal.ct.gov/-/media/ohs/health-it-advisory-council/apcd-advisory-group/data-submission-guide-workgroup/meeting-materials/6-30-22/carc-codes_final.pdf
  4. https://medicaid-documents.dhhs.utah.gov/Documents/pdfs/ClaimDenialCodes.pdf
  5. Codes maintained by X12. Visit x12.org for official definitions.