CARC 307 Active

OA-307: Medicare Maximum Fair Price Standard Default Refund Amount

TL;DR

OA-307 is an MFP adjustment applied during claim reprocessing. Verify the amount against CMS published pricing.

Action
Review & Decide
Who Pays
Depends
Appeal
Yes
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-307 Mean?

When paired with Group Code OA, the MFP adjustment was applied during claim reprocessing or reflects a systemic recalculation. The adjustment is not attributable to a specific provider error or patient responsibility. Verify the recalculated amount is correct.

CARC 307 is a Medicare-specific adjustment code related to the Maximum Fair Price (MFP) provisions established by the Inflation Reduction Act (IRA). Under this program, Medicare negotiates maximum prices for certain high-cost drugs. When a provider bills for one of these drugs at an amount exceeding the negotiated MFP, Medicare adjusts the payment to reflect the MFP standard.

This code will typically appear as a payment reduction rather than a full denial. The adjustment represents the difference between the billed amount and the Maximum Fair Price for the applicable drug. CMS publishes the MFP amounts for covered drugs, and providers should reference these published prices to verify the accuracy of the adjustment.

Because this is a regulatory pricing mechanism rather than a coverage determination, the adjustment is generally accepted. However, if the MFP amount applied appears incorrect — for example, the wrong drug was matched or the pricing was not current — an appeal is warranted.

Common Causes

Cause Frequency
MFP adjustment during reprocessing Claim reprocessing applied the MFP standard, resulting in an adjustment not attributable to provider or patient Most Common
Systemic MFP recalculation Medicare recalculated payments based on updated MFP amounts Common

How to Resolve

  1. Review the remark codes Check the RARC for details about the MFP recalculation.
  2. Verify against CMS pricing Confirm the recalculated MFP amount matches CMS published prices.
  3. Contact MAC if questionable If the recalculated amount appears incorrect, contact the MAC.
Appeal Guide

Appeal with CMS published MFP pricing documentation showing the adjustment calculation is incorrect.

Common RARC Pairings

The RARC code tells you exactly what triggered the OA-307:

RARC Description
N848 Alert: This adjustment is based on the Maximum Fair Price. Verify the MFP adjustment amount against CMS published prices →

How to Prevent OA-307

Also Filed As

The same CARC 307 may appear with different Group Codes:

CO-307 PR-307

Related Denial Codes

OA-24 — Charges Covered Under Capitation/Managed Care OA-44 — Prompt-Pay Discount OA-45 — Charge Exceeds Fee Schedule/Maximum Allowable OA-69 — Day Outlier Amount OA-70 — Cost Outlier Adjustment

Sources

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