CARC 205 Active

CO-205: Pharmacy Discount Card Processing Fee

TL;DR

This is a contractual processing fee. Verify it matches your contract terms. Contact the processor directly for discrepancies.

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-205 Mean?

With CO (Contractual Obligation), the processing fee is a contractual deduction from the pharmacy's reimbursement. This is the standard assignment for discount card processing fees. The fee is per the terms of the pharmacy's participation agreement. Do not appeal — contact the processor directly if the amount is incorrect.

CARC 205 represents a per-transaction processing fee that is deducted from the pharmacy's payment when a claim is processed through a pharmacy discount card program. This is not a denial — it is a contractual fee reduction that the pharmacy agreed to when enrolling in the discount card program.

Pharmacy discount cards (such as GoodRx, SingleCare, or payer-specific discount programs) provide patients with reduced drug prices, but pharmacies pay a processing fee for each transaction. This fee is deducted from the pharmacy's reimbursement on each claim. The amount is determined by the pharmacy's contract with the discount card processor.

Common Causes

Cause Frequency
Pharmacy discount card processing fee deducted from reimbursement The payer deducts a processing fee for claims submitted through a pharmacy discount card program, reducing the provider's reimbursement Most Common
Contractual fee for discount card program participation The pharmacy has a contractual agreement with the discount card processor that includes a per-transaction processing fee Common
Administrative fee for third-party discount program A third-party administrator charges an administrative fee for processing pharmacy discount card transactions Common

How to Resolve

  1. Verify the fee Compare the deducted amount against your contractual terms.
  2. Contact the processor for errors If the fee is incorrect, contact the discount card processor directly.
  3. Track financial impact Monitor processing fees regularly to evaluate program viability.
Do Not Appeal This Code

This is a contractual processing fee for the pharmacy discount card program. The fee is per the terms of your participation agreement. If you believe the fee amount is incorrect, contact the discount card processor directly rather than filing a payer appeal.

Common RARC Pairings

The RARC code tells you exactly what triggered the CO-205:

RARC Description
N381 Alert: Consult your contractual agreement for restrictions, billing, and payment information. Review your discount card program contract for the applicable processing fee schedule →

How to Prevent CO-205

Also Filed As

The same CARC 205 may appear with different Group Codes:

OA-205 PR-205

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://x12.org/codes/claim-adjustment-reason-codes
  2. https://www.mdclarity.com/denial-code/205
  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. Codes maintained by X12. Visit x12.org for official definitions.