August 9, 2026

CARC 45 & RARC 96 in Behavioral Health: What They Really Mean

If you are pulling your remittance advice reports and seeing Claim Adjustment Reason Code (CARC) 45 paired with Remark Code (RARC) N96 or M96, you are not alone. Across the roughly 50 behavioral health practices we work with at Revenant Care Group, this combination has become one of the top three denial and adjustment patterns we document on a weekly basis, and the financial hit is far larger than most billing teams realize when they simply post the write-off and move on.

This post explains exactly what CARC 45 and RARC 96 mean in plain operational terms, why they surface so frequently on behavioral health and SUD claims, and what your team should do differently starting tomorrow. We are not talking theory here. We are talking specific CPT codes, payer behaviors, and recovery steps that apply to real outpatient behavioral health, ABA, and SUD practices billing in 2026.

What CARC 45 Actually Means on a Behavioral Health EOB

CARC 45 reads: “Charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement.” In plain English, the payer is telling you that your billed charge is higher than what the contract or fee schedule allows, and they are adjusting the difference as a contractual write-off. For most practices, this is an expected, routine adjustment on in-network claims.

The problem is that CARC 45 is frequently misapplied. Payers sometimes use CARC 45 when the real issue is a fee schedule load error on their side, a credential lag where your provider is not yet mapped to the correct contracted rate, or a modifier that triggered a different allowed amount calculation than intended. We see this regularly on claims for CPT 90837 (individual psychotherapy, 60 minutes), CPT 90847 (family therapy with patient), and CPT 97153 (adaptive behavior treatment by protocol, used in ABA). In each of those cases, a CARC 45 that looks routine may actually represent a recoverable underpayment.

What RARC 96 Means and Why It Shows Up With CARC 45

RARC 96 reads: “Non-covered charge(s). At least one Remark Code must be provided.” When RARC 96 accompanies CARC 45, the payer is layering two messages: the charge exceeds the fee schedule, and at least part of the service is being treated as non-covered. This combination is a significant flag in behavioral health billing because it often indicates a medical necessity determination dressed up as a fee schedule adjustment.

In practice, we see the CARC 45 plus RARC 96 combination appear most often on the following scenarios:

H0015 (alcohol and/or drug services, intensive outpatient) billed with POS 57 or POS 11 where the payer’s internal criteria for IOP medical necessity are not met but the denial is coded as a fee issue rather than a clinical one
CPT 90791 (psychiatric diagnostic evaluation) billed with modifier 95 for telehealth, where the payer has not updated their telehealth fee schedule to reflect current CMS rates
CPT 97155 (adaptive behavior treatment with protocol modification) in ABA, where a specific modifier or authorization number is missing and the payer defaults to a non-covered code response
CPT 99213 or 99214 billed by a licensed clinical social worker under a group NPI where the payer’s system has not correctly linked the LCSW credential to a covered provider type

The Dollar Impact: Why This Is Not a Small Write-Off Problem

At a 10-provider outpatient behavioral health group billing primarily CPT 90837, 90834, 90791, and 90847, a systematic CARC 45 underpayment of just $8 per unit on 90837 produces approximately $38,400 in annual write-off erosion, assuming each provider sees 60 units per week and the payer applies the reduced rate to 40% of claims. That is not a rounding error. That is a staffing decision.

For a mid-sized SUD practice billing H0015, H2036 (alcohol and other drug treatment services, not otherwise specified), and G-codes for drug screening, the math compounds faster because IOP and PHP services involve higher per-session dollar values. A single wrongly applied CARC 45 on an H0015 claim can represent a $120 to $190 underpayment per date of service depending on the payer and your contracted rate. Multiply that across 200 IOP visits per month and you are looking at $24,000 to $38,000 in potential recovery before any audit adjustment.

If your SUD practice is also running confirmatory drug screens under G0480 through G0483, CARC 45 and RARC 96 denials in that revenue line compound the problem further. We have written specifically about how most SUD practices are already undercoding those tests, which you can review at our G0480-G0483 drug screen coding guide.

How to Audit CARC 45 Denials Before You Write Them Off

Your billing team should never post a CARC 45 write-off without completing the following three-step check:

Step 1: Pull the contracted rate. Compare your EOB allowed amount against your actual executed contract rate for that CPT code, modifier, and POS combination. If you do not have a clean fee schedule matrix by payer by code, that gap itself is costing you money and needs to be fixed first.
Step 2: Check the credential and NPI mapping. Confirm that the rendering provider’s individual NPI, license type, and taxonomy code are correctly loaded with the payer for the date of service. A credential or re-credentialing lag is one of the most common drivers of erroneous CARC 45 adjustments, especially in the first 90 days after a provider joins a group.
Step 3: Identify payer pattern vs. one-off. Run a 90-day report filtered by CARC 45 grouped by payer, CPT code, and rendering provider. If you see a payer applying CARC 45 to the same CPT code at a rate greater than 15% of claims for that code, that is a systematic fee schedule issue or contract load error that warrants a formal written dispute, not individual claim appeals.

MHPAEA Parity and the CARC 45 Connection

Here is a layer that most billing teams miss entirely. When CARC 45 and RARC 96 are being applied to behavioral health codes at rates higher than they are applied to analogous medical or surgical codes on the same plan, that pattern may constitute a quantitative treatment limitation violation under the Mental Health Parity and Addiction Equity Act. Payers cannot systematically underpay behavioral health services relative to medical services when they are covering the same plan members.

We documented this pattern in detail, including how to build a parity data request and use it as a formal appeal lever, in our post on MHPAEA parity appeals for behavioral health practices. If your CARC 45 data shows concentration on behavioral health CPT codes with virtually no parallel adjustments on the same payer’s medical claims, you have more than a billing problem. You have a parity complaint.

What to Do This Week With Your Remittance Data

Pull every CARC 45 and RARC 96 transaction posted in the last 180 days. Sort by dollar volume, not by claim count. Identify the top five payer-code combinations driving the most write-off dollar volume. For each combination, run the three-step check above. Prioritize any combination where the allowed amount is more than 10% below your contracted rate or below the current Medicare fee schedule for that code and locality. For POS 11 outpatient telehealth claims with modifier 95 or 93, specifically verify that the payer has updated their 2026 fee schedule to reflect post-pandemic telehealth reimbursement levels, because several commercial payers have been slow to load corrected rates and have been applying CARC 45 to the gap rather than correcting the fee table.

If you want a second set of eyes on what your remittance data is actually telling you, we offer a free 30-day denial audit for behavioral health practices. We will pull your CARC and RARC distribution, identify your top write-off drivers, and give you a prioritized recovery action list with no obligation. Schedule your free audit here and let us show you exactly where your revenue is going before you write it off permanently.