CARC P3 Active

CO-P3: Workers' Compensation Case Settled — Patient Responsible via MSA

TL;DR

CO-P3 confirms the WC carrier is no longer liable post-settlement. Do not submit further claims to this WC carrier for this case.

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-P3 Mean?

When paired with Group Code CO, the WC carrier is confirming its liability has ended per the settlement agreement. The carrier will no longer process claims for this case.

CARC P3 indicates the workers' compensation case has been legally settled, and the patient is now financially responsible for related medical expenses, typically through a Medicare Set-Aside (MSA) arrangement or structured settlement funds. The WC carrier is no longer liable for the claim.

When a WC case settles, a portion of the settlement may be designated as an MSA — funds set aside to cover future Medicare-covered medical expenses related to the work injury. The patient must use these funds for qualifying medical expenses before Medicare will begin covering them. Providers bill the MSA administrator or the patient directly for services related to the settled WC claim.

This is a legal settlement determination, not an appealable insurance denial. The WC carrier's liability ended per the terms of the settlement agreement.

Common Causes

Cause Frequency
WC carrier no longer liable post-settlement After the WC case was settled, the carrier is no longer liable for the claim and writes off its responsibility Most Common

How to Resolve

  1. Stop billing the WC carrier Do not submit further claims to the WC carrier for this settled case.
  2. Update billing records Update the patient's insurance records to reflect the settlement.
  3. Redirect billing Bill the MSA, patient, or health insurance as appropriate.
Do Not Appeal This Code

The WC case is settled and the carrier's liability has ended per the legal agreement. The carrier is no longer responsible for claims related to this case.

How to Prevent CO-P3

Also Filed As

The same CARC P3 may appear with different Group Codes:

PR-P3 OA-P3

Related Denial Codes

CO-19 — Workers' Compensation Claim CO-20 — Liability Carrier Responsible CO-21 — No-Fault Carrier Responsible CO-22 — Coordination of Benefits - Another Payer May Cover CO-23 — Prior Payer Adjudication Impact

Sources

  1. https://x12.org/codes/claim-adjustment-reason-codes
  2. https://www.cms.gov/medicare/coordination-benefits
  3. Codes maintained by X12. Visit x12.org for official definitions.