CARC 75 Active

OA-75: Direct Medical Education Adjustment

TL;DR

The DGME adjustment balance is flagged for the secondary payer. Forward the claim with the primary ERA.

Action
Resubmit
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-75 Mean?

OA-75 appears in coordination of benefits situations where the primary payer's DGME adjustment is passed to a secondary payer. The amount does not represent a direct provider loss — it signals the secondary payer should evaluate the balance.

CARC 75 represents the Direct Graduate Medical Education payment adjustment on remittances for teaching hospitals. Unlike the Indirect Medical Education adjustment (CARC 74) which is a percentage add-on to DRG payments, DGME is a separate aggregate payment calculated through a distinct formula based on three inputs: the hospital-specific per-resident amount (PRA), the number of full-time equivalent (FTE) residents in approved programs, and Medicare's share of total inpatient days.

The DGME payment compensates teaching hospitals for the direct costs of training residents — salaries, benefits, and allocated overhead for residency programs accredited by ACGME or ADA. Because DGME is calculated as an aggregate pass-through payment rather than a per-discharge add-on, the adjustment on any individual claim reflects the hospital's overall DGME allocation spread across its Medicare discharges.

CARC 75 is almost always paired with Group Code CO, making it a contractual write-off. The adjustment amount on each claim represents the gap between billed charges and the DGME-allocated payment. If the adjustment seems unexpectedly large or small, the issue typically traces to outdated FTE resident counts, an incorrect per-resident amount, or a shift in the Medicare share of inpatient days. Teaching hospitals should build DGME reconciliation into their revenue cycle workflow alongside CARC 74 (IME) and CARC 76 (DSH) to catch discrepancies across all three Medicare payment adjustments.

Common Causes

Cause Frequency
Coordination of benefits DGME adjustment In multi-payer situations, the primary payer's DGME adjustment passes to the secondary payer under OA Most Common

How to Resolve

Reconcile the DGME adjustment against expected payment amounts by verifying the per-resident amount, FTE counts, and Medicare inpatient day share.

  1. Submit to the secondary payer File a secondary claim with the primary ERA showing the OA-75 adjustment and all relevant teaching hospital documentation.
  2. Process the secondary ERA Review the secondary adjudication and post the payment or adjustment.
Do Not Appeal This Code

This adjustment is typically correct as processed. Review the specific circumstances before taking further action.

How to Prevent OA-75

General Prevention

Also Filed As

The same CARC 75 may appear with different Group Codes:

CO-75

Related Denial Codes

OA-13 — Date of Death Precedes Date of Service OA-19 — Workers' Compensation Claim OA-20 — Liability Carrier Responsible OA-21 — No-Fault Carrier Responsible OA-22 — Care Covered by Another Payer (COB)

Sources

  1. https://www.mdclarity.com/denial-code/75
  2. https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/direct-graduate-medical-education-dgme
  3. https://ambci.org/medical-billing-and-coding-certification-blog/guide-to-claim-adjustment-reason-codes-carcs
  4. Codes maintained by X12. Visit x12.org for official definitions.