CARC 278 Active

OA-278: Performance Program Proficiency Requirements Not Met

TL;DR

OA-278: This adjustment involves secondary payer processing or coordination of benefits. Review the COB arrangement and primary payer adjudication to determine the appropriate action.

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-278 Mean?

When paired with Group Code OA, CARC 278 typically appears in a secondary payer or coordination of benefits context. The adjustment for performance program proficiency requirements not met is being processed through COB rules. The financial responsibility depends on the specific coordination arrangement between payers.

CARC 278 indicates a payment adjustment because the provider failed to meet the proficiency requirements of a quality or performance program. These programs — including CMS's Merit-based Incentive Payment System (MIPS), commercial value-based payment arrangements, and other pay-for-performance contracts — set specific benchmarks that providers must achieve to receive full payment.

The adjustment can stem from genuinely failing to meet quality metrics, but it can also result from incomplete or incorrect data reporting. If the provider met the benchmarks but the data was not properly submitted or was submitted late, the payer may incorrectly apply the adjustment. The 835 Healthcare Policy Identification Segment (loop 2110 REF) typically identifies which specific program triggered the adjustment. Under CO, the adjustment is treated as a contractual obligation — the provider agreed to the performance terms and did not meet them. Under PI, the payer initiated the reduction based on their assessment of the provider's performance metrics.

How to Resolve

  1. Review the coordination of benefits Examine the OA-278 adjustment and determine how it fits within the primary/secondary payer relationship.
  2. Verify primary payer adjudication Review the primary payer's EOB to understand the basis for the secondary payer's OA adjustment.
  3. Determine appropriate action Based on the COB review, decide whether to accept the adjustment, submit additional documentation, or file an appeal with the secondary payer.
  4. Follow up Monitor the claim and take additional action as needed based on the COB determination.
Do Not Appeal This Code

Performance Program Proficiency Requirements Not Met 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.

How to Prevent OA-278

Also Filed As

The same CARC 278 may appear with different Group Codes:

CO-278 PI-278 PR-278

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/278
  2. https://resdac.org/sites/datadocumentation.resdac.org/files/Adjustment%20Reason%20Code%20Code%20Table%20(TAF%20Claims).txt
  3. https://x12.org/codes/claim-adjustment-reason-codes
  4. Codes maintained by X12. Visit x12.org for official definitions.