CARC 246 Active

CO-246: Non-Payable Code for Required Reporting Only

TL;DR

CO-246 confirms a non-payable reporting code was processed correctly. No action needed unless the wrong code was used.

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-246 Mean?

When paired with Group Code CO, the non-payable reporting code adjustment is a contractual matter. The code was submitted for required reporting and the zero payment is expected per the contract. The provider cannot collect from the patient for this adjustment.

CARC 246 indicates that the line item on your claim was submitted using a non-payable code designated exclusively for required reporting purposes. This is not a denial of a service you expected to be paid — it is a confirmation that the code was processed exactly as intended: for data collection, not reimbursement.

These reporting-only codes appear in several contexts. In managed care or capitated arrangements, encounter data is reported for tracking purposes even though payment is not made on a per-service basis. In quality measurement programs, certain codes are submitted to satisfy statistical tracking or regulatory reporting requirements. In bundled payment arrangements, individual service codes may be reported for transparency while the payment is made through a separate mechanism.

If you are seeing CARC 246 on a line item you expected to generate revenue, the issue is likely a misunderstanding of the code's purpose or a billing configuration error where a reporting-only code was used instead of a payable service code.

Common Causes

Cause Frequency
Line item submitted for tracking/reporting purposes only The procedure code on this line was submitted for required reporting purposes and was never intended to generate separate payment Most Common
Encounter reporting code with zero payment The code is used for encounter data reporting in managed care or capitated arrangements where payment is not made on a per-service basis Common
Statistical reporting code The code is required for statistical tracking, quality measurement, or regulatory reporting but does not carry separate reimbursement Common

How to Resolve

  1. Confirm the line item is for reporting only Review the claim to verify this line was intended for reporting purposes only and not for separate reimbursement.
  2. Check for billing errors If the line should have been a payable service, verify the procedure code and billing setup. Correct the code and resubmit if necessary.
  3. No action if correct If the reporting-only code is correct, this denial is expected. No follow-up is required.
  4. Remove erroneous codes from future claims If the code was submitted in error, update your billing templates to prevent resubmission of non-payable codes on future claims.
Do Not Appeal This Code

This is a non-payable code submitted for required reporting purposes only. It was never intended to generate separate payment. No appeal is warranted.

How to Prevent CO-246

General Prevention

Also Filed As

The same CARC 246 may appear with different Group Codes:

OA-246 PR-246

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://x12.org/codes/claim-adjustment-reason-codes
  2. 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
  3. https://www.aapc.com/resources/claim-adjustment-reason-codes
  4. Codes maintained by X12. Visit x12.org for official definitions.