Reading the codes on a dental EOB: group codes, CARCs and RARCs explained

PearlFlow guides · November 12, 2026

Insurance payments come with short codes like "CO-45" or "PR-2" that follow a published standard. Once you know the three kinds of code and how they fit together, you can post a payment correctly and spot denials worth fighting.

Why EOBs carry standardized codes

When a payer sends payment details electronically, it uses a format called the X12 835, also known as the electronic remittance advice (ERA). Under HIPAA, CMS says all payers must explain adjustments with Claim Adjustment Reason Codes (CARCs) and Remittance Advice Remark Codes (RARCs) from the official lists. Payers aren't allowed to substitute their own codes in the ERA (CMS).

For any adjustment on a line or claim, CMS lists three sets of codes that can appear:

• a group code, which says who is responsible for the money,
• a CARC, which says why the amount was adjusted,
• a RARC, which adds more detail when needed.

Paper and PDF EOBs vary more. The ADA notes that EOBs carry remark codes explaining the payer's decision. Some payers print the standard codes. Others print their own internal codes, which X12 and CAQH CORE describe as mapped to the standard ones behind the scenes. If a paper code is unclear, the payer's code legend or your ERA for the same claim will show the standard version.

Group codes: who owes the money

There are only four group codes (X12). The names come from X12, and the explanations follow CMS guidance.

• CO – Contractual Obligation. A contract between the payer and your office, or a regulation, caused the adjustment. CMS says these amounts are generally written off by the provider and not billed to the patient.
• PR – Patient Responsibility. The amount can be billed to the patient. Deductibles and copays are the typical examples.
• PI – Payor Initiated Reduction. The payer decided the patient isn't responsible for the reduction, even though there is no contract between the payer and the provider behind it.
• OA – Other Adjustment. Used when no other group code applies. X12 points out that OA doesn't clearly say who is liable, so look at the reason code next to it.

CARCs: the reason for the adjustment

A CARC is a number that explains why the payment differs from what you billed. The list is published by X12 and used by all kinds of health plans, so some codes read like medical billing. Codes are added, reworded and retired regularly, and CMS says the CARC committee reviews change requests three times a year.

These codes come up often on dental claims. The wording is from the official X12 list.

Some entries carry usage notes. CARC 18 is meant for group code OA, CARC 45 for PR or CO, and CARCs 16 and 96 must come with at least one remark code.

RARCs: the extra detail

A RARC adds detail that the reason code can't carry on its own. CMS maintains the RARC list, any health plan may use it, and the list is published on x12.org. CMS says remark code requests are reviewed 12 times a year. Remark codes that begin with "Alert" are for information only and don't explain a specific adjustment.

Three remark codes that fit dental claims:

• N37: "Missing/incomplete/invalid tooth number/letter."
• N130: "Consult plan benefit documents/guidelines for information about restrictions for this service."
• N640: "Exceeds number/frequency approved/allowed within time period."

For example, a CO-16 denial paired with N37 means the claim was missing a valid tooth number.

How the codes work together

Read the group code and the CARC as a pair. CO-45 means the fee was above your contracted fee and you write off the difference. PR-1 means the amount went to the patient's deductible and you bill the patient.

A worked example, for an in-network crown (made-up numbers):

• Billed: $1,200
• Plan allowance: $900
• CO-45: $300. This is the amount over the contracted fee, and you write it off.
• PR-1: $50. This is the remaining deductible, and the patient owes it.
• PR-2: $425. The plan pays 50% after the deductible. The allowance minus the deductible is $850, half of $850 is $425, and the patient owes that half.
• Insurance paid: $425

Check: $300 + $50 + $425 + $425 = $1,200, so every billed dollar is accounted for. The patient owes $475.

Practical posting takeaways

• Post CO-45 as a contractual adjustment. Don't move it to the patient's balance.
• Move PR amounts to the patient. Deductible (PR-1), coinsurance (PR-2) and copay (PR-3) are what the patient owes under their plan.
• Treat a denial as something to act on. Read the group code, the CARC and any RARC together:
  • CO-16 with a remark code usually means information is missing. Fix the claim and resubmit.
  • CO-29 (timely filing) is generally a write-off unless you can prove you filed on time.
  • CARC 119, or 151 with N640, points to a maximum or frequency limit. Check the patient's history and appeal if it was counted wrongly.
  • PR-96 or PR-119 shows the payer is putting the cost on the patient. Bill according to your agreement with the patient, your network contract and your state's rules.
• Don't post OA-18 as a payment or a write-off. It flags a duplicate claim, so find the original claim first.
• Keep the official lists bookmarked. Codes change during the year, so look up unfamiliar codes on x12.org.

For the full posting routine, from matching the deposit to closing the claim, see our step-by-step posting checklist.

Sources

• CMS, Health care payment & remittance advice and EFT and Medicare remittance advice
• CMS, Medicare Claims Processing Manual, Chapter 22 (group code and remark code definitions)
• X12, Claim Adjustment Group Codes, Claim Adjustment Reason Codes and Remittance Advice Remark Codes (code wording checked November 2026)
• X12, RFI 2814 on group code OA
• CAQH CORE, CARC/RARC rule and X12/CAQH CORE 835 webinar slides
• ADA, Explanation of Benefits statement

This guide is general information, not legal or billing advice. Check your payer contracts and your state’s rules for your own practice.