OA-237: Legislated/Regulatory Penalty

What Does OA-237 Mean?

With OA, the penalty was applied as an informational adjustment during coordination of benefits.

CARC 237 indicates that the payer reduced payment on the claim as a penalty mandated by legislation or regulation. Common examples include Medicare payment reductions under the Hospital Readmissions Reduction Program (HRRP), Medicare's Value-Based Purchasing (VBP) penalties, sequestration reductions, or state-mandated penalty programs.

Unlike CARC 223 (legislated adjustment), which is a general regulatory adjustment, CARC 237 specifically indicates a penalty — a punitive reduction based on the provider's performance, compliance, or other regulatory criteria. These penalties are typically not appealable through normal claim appeal channels.

Common Causes

How to Resolve

1. Verify the penalty Confirm the penalty amount and program.
2. Accept if correct Regulatory penalties are typically not appealable.

How to Prevent OA-237

• Address quality metrics to reduce penalties across all payers

General Prevention

• Maintain regulatory compliance across all programs

Also Filed As

The same CARC 237 may appear with different Group Codes:

Related Denial Codes