CARC 256 Active

OA-256: Service Not Payable Per Managed Care Contract

TL;DR

The service is not payable under the patient's managed care contract. Review the contract to determine if the service is excluded, requires pre-authorization, or was coded incorrectly. Correct and resubmit or appeal if the service should be covered.

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-256 Mean?

CARC 256 indicates that the payer denied or reduced the claim because the billed service is not payable under the terms of the managed care contract. This is a contract-based denial, meaning the payer evaluated the claim against the managed care agreement and determined the service does not qualify for payment.

The denial can stem from multiple contract-related issues. The service may be explicitly excluded from the managed care contract. It may require pre-authorization that was not obtained. The provider may be out of network for the patient's managed care plan. The patient may have exceeded benefit limits for this service category. There may be billing or coding issues that cause the service to appear non-covered when it actually should be payable.

The first step is always to review the managed care contract to understand why the service was denied. If the denial is correct — the service truly is not payable — the provider must absorb the cost under the contract. If the denial resulted from a correctable error (wrong code, missing authorization, billing issue), correcting and resubmitting or appealing is the appropriate path.

How to Resolve

Review the managed care contract, identify the specific denial reason, and either correct the claim or appeal with supporting documentation.

  1. Review the managed care contract Check the contract's covered services, exclusions, authorization requirements, and billing guidelines to understand why this service was denied.
  2. Verify coding accuracy Confirm the procedure codes, modifiers, and claim details are correct and align with the contract terms. A coding error may make a covered service appear non-covered.
  3. Check authorization status If the service requires pre-authorization, verify whether it was obtained. If it was obtained, confirm the authorization number is on the claim.
  4. Correct and resubmit if applicable If a coding error, missing modifier, or missing authorization number caused the denial, correct the claim and resubmit.
  5. File a formal appeal if warranted If the service should be covered under the contract, file an appeal with relevant contract provisions, medical records, and a letter explaining why the service qualifies for payment.
  6. Monitor and follow up Track the appeal status and provide additional documentation as requested by the payer.
Do Not Appeal This Code

Service Not Payable Per Managed Care Contract grouped under OA is an Other Adjustment that doesn't fall into the standard contractual write-off or patient responsibility categories. Whether action is needed depends on the specific reason — review any accompanying RARC codes and payer guidance to decide whether this is a final adjustment to accept or an issue to resolve through resubmission.

Also Filed As

The same CARC 256 may appear with different Group Codes:

CO-256 PR-256

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://www.mdclarity.com/denial-code/256
  2. https://avenuebillingservices.com/co-256-denial-code/
  3. https://medibillmd.com/blog/co-256-denial-code/
  4. https://x12.org/codes/claim-adjustment-reason-codes
  5. Codes maintained by X12. Visit x12.org for official definitions.