CARC 308 Active

OA-308: Contracted Funding Agreement Adjustment

TL;DR

OA-308 reflects a funding agreement adjustment involving third-party or program-specific funding. Verify the amount and dispute if it does not match the agreement.

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-308 Mean?

When paired with Group Code OA, the funding agreement adjustment involves a third-party arrangement or program-specific funding rules (such as supplemental payments or DSH payments). The adjustment is not attributable to a specific provider error or patient responsibility.

CARC 308 indicates that the payment was adjusted based on a contracted funding agreement between the provider and the payer. This code covers a broad range of contractual payment arrangements including negotiated rate reductions, value-based payment model adjustments, capitation or bundled payment offsets, and risk-sharing arrangement modifications.

Unlike standard fee schedule adjustments, CARC 308 specifically references a "funding agreement" — a formal contractual arrangement that defines how payment is calculated. These agreements may involve alternative payment models where reimbursement is tied to quality outcomes, cost efficiency, or population health metrics rather than traditional fee-for-service rates.

The adjustment amount should align with the specific terms of your contracted funding agreement. If the adjustment does not match the contracted rates or methodology, dispute it through the contract's designated dispute resolution process rather than the standard claims appeal process.

Common Causes

Cause Frequency
Third-party funding arrangement Adjustment reflects a funding agreement involving multiple parties beyond the direct payer-provider relationship Common
Program-specific funding adjustment Adjustment based on specific program funding rules (e.g., supplemental payments, DSH payments) Common

How to Resolve

  1. Review the applicable funding agreement Check the adjustment against the funding agreement terms.
  2. Contact the payer for clarification Request details about the OA adjustment calculation.
  3. Verify program-specific rules Confirm whether the adjustment relates to supplemental payments or other program-specific funding.
Appeal Guide

Dispute with documentation from the funding agreement showing the adjustment does not match the agreed terms.

Common RARC Pairings

The RARC code tells you exactly what triggered the OA-308:

RARC Description
N381 Alert: Consult your contractual agreement for restrictions, billing, and payment information. Review the funding agreement for OA adjustment details →

How to Prevent OA-308

Also Filed As

The same CARC 308 may appear with different Group Codes:

CO-308 PR-308

Related Denial Codes

OA-24 — Charges Covered Under Capitation/Managed Care OA-45 — Charge Exceeds Fee Schedule/Maximum Allowable OA-271 — Prior Contractual Reductions on Current Payment Schedule OA-1 — Deductible Amount OA-2 — Coinsurance Amount

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.