CARC 260 Active

CO-260: Processed Under Medicaid ACA Enhanced Fee Schedule

TL;DR

CO-260 is a contractual adjustment to the Medicaid ACA enhanced rate. Verify the rate is correct and appeal if the wrong fee schedule was applied.

Action

Review & Decide

Who Pays

Provider

Appeal

Yes

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-260 Mean?

When paired with Group Code CO, the Medicaid ACA Enhanced Fee Schedule adjustment is a contractual reduction from billed charges to the allowed amount. The provider accepts the Medicaid rate and cannot transfer the difference to the patient.

CARC 260 indicates that the claim was processed using the Medicaid ACA Enhanced Fee Schedule rates established under the Affordable Care Act. This code appears when the payment amount reflects the ACA-enhanced Medicaid rates, which may differ from what the provider expected based on standard Medicaid or other fee schedules.

The ACA enhanced certain Medicaid payment rates, particularly for primary care services provided by qualifying physicians. When this code appears, it means the payer applied these enhanced rates to your claim. The adjustment may result in a higher or lower payment than your billed charges, depending on the rate differential.

If the payment amount appears incorrect, the issue may be an eligibility verification problem, a coding error that triggered the wrong fee schedule, or a service that does not qualify for the enhanced rates. Reviewing the claim details against the published Medicaid ACA Enhanced Fee Schedule for your state is the first diagnostic step.

Common Causes

Cause	Frequency
Service processed under Medicaid ACA Enhanced Fee Schedule The claim was processed using the Medicaid ACA Enhanced Fee Schedule rates, which may result in a different reimbursement amount than billed	Most Common
Provider enrollment or eligibility issues with Medicaid Eligibility errors such as incorrect Medicaid ID, outdated status, or wrong coverage dates caused the claim to be processed under the enhanced fee schedule differently than expected	Common
Coding errors affecting fee schedule application Wrong procedure or diagnosis codes caused the incorrect Medicaid fee schedule rate to be applied to the claim	Common
Service not eligible under Medicaid ACA Enhanced Fee Schedule The specific service or procedure does not qualify for enhanced rates under the ACA Medicaid provisions	Common

How to Resolve

Verify coding and eligibility Confirm procedure codes are correct and the patient's Medicaid eligibility supports the applied fee schedule.
Compare the rate against published amounts Check the payment against the published Medicaid ACA Enhanced Fee Schedule rates for your state.
Correct coding errors and resubmit If a coding error caused the wrong rate to be applied, correct the codes and resubmit.
Appeal incorrect rate application If the fee schedule rate is wrong, appeal with rate documentation from the Medicaid agency.
Follow up on appeal Monitor the appeal and respond to requests for additional information.

Appeal Guide

If the Medicaid ACA Enhanced Fee Schedule was incorrectly applied, file an appeal with documentation showing the correct fee schedule rate, including the applicable ACA provision, the service details, and evidence that the service qualifies for a different rate.

Common RARC Pairings

The RARC code tells you exactly what triggered the CO-260:

RARC	Description
N381	Alert: Consult your contractual agreement for restrictions, billing, and payment information. Review the Medicaid ACA Enhanced Fee Schedule to verify the correct rate was applied to the service →

How to Prevent CO-260

Verify patient Medicaid eligibility before service delivery to confirm the correct fee schedule applies
Monitor Medicaid ACA Enhanced Fee Schedule policy updates regularly
Ensure accurate documentation and coding practices that align with Medicaid requirements
Submit claims promptly within Medicaid filing deadlines
Track and analyze denial trends related to Medicaid fee schedule issues

General Prevention

Verify patient Medicaid eligibility before service delivery to confirm correct fee schedule application

Also Filed As

The same CARC 260 may appear with different Group Codes:

OA-260 PR-260

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

https://www.mdclarity.com/denial-code/260
https://resdac.org/sites/datadocumentation.resdac.org/files/Adjustment%20Reason%20Code%20Code%20Table%20(TAF%20Claims).txt
https://x12.org/codes/claim-adjustment-reason-codes
Codes maintained by X12. Visit x12.org for official definitions.