CARC 225 Active

OA-225: Penalty or Interest Payment by Payer

TL;DR

The payer is paying a penalty or interest for late claim processing. Verify the amount and record it.

Action
Review & Decide
Who Pays
Depends
Appeal
No
Patient Impact
Indirect
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 OA-225 Mean?

With OA (Other Adjustments), this is the standard group code for penalty or interest payments. The payer is adding an interest payment to the claim. Verify the amount and record it.

CARC 225 is a positive adjustment — it represents a penalty or interest payment from the payer to the provider. Many state laws and federal regulations require payers to process claims within specified timeframes (prompt payment laws), and when they fail to do so, they must pay interest or penalties to the provider.

This code typically appears alongside the original claim payment when the payer adds an interest amount for late processing. The provider should verify the penalty or interest amount matches the applicable prompt payment law requirements.

Common Causes

Cause Frequency
Payer-to-payer penalty payment reporting This code reports penalty or interest payments made between payers in plan-to-plan encounter reporting, not related to provider claims Most Common
Late payment interest accrual between plans Interest that accrued due to delayed payments between health plans is reported using this code Common
Regulatory penalty between payers A penalty assessed between payers for regulatory non-compliance or late payment is recorded via CARC 225 Occasional

How to Resolve

  1. Verify the interest amount Check the amount against the applicable prompt payment law.
  2. Record the payment Apply the payment to the correct account.
  3. Follow up if insufficient If the amount is less than required, contact the payer.
Do Not Appeal This Code

This code is used exclusively for plan-to-plan encounter reporting within the 837 transaction. It reports penalty or interest payments between payers and is not a provider-facing denial. No appeal is warranted.

How to Prevent OA-225

General Prevention

Also Filed As

The same CARC 225 may appear with different Group Codes:

CO-225 PR-225

Related Denial Codes

OA-74 — Indirect Medical Education Adjustment OA-75 — Direct Medical Education Adjustment OA-76 — Disproportionate Share Adjustment OA-85 — Patient Interest Adjustment OA-89 — Professional Fees Removed from Charges

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.