CARC 256: Service not payable per managed care contract.
The Medicare Advantage or Medicaid MCO plan's contract specifically excludes or doesn't cover this service.
CARC 256 is the code your insurance company used to explain why your claim was reduced, denied, or paid less than expected. It appears on your Explanation of Benefits (EOB) — the statement your plan sends after a claim is processed. Here's what it means for you and what you can do about it.
What CARC 256 means
The official X12 description is: “Service not payable per managed care contract.”
In plain language: The Medicare Advantage or Medicaid MCO plan's contract specifically excludes or doesn't cover this service.
Common scenarios
- MA plan denies what Original Medicare covers
- Medicaid MCO carve-out
- Out-of-network MA emergency
What to do next 256
Appeal under MA grievance/appeal rights (42 CFR 422 Subpart M) or Medicaid MCO appeal process (42 CFR 438 Subpart F). Both require expedited timelines for urgent care.
DenialHelp helps organize a source-linked draft from the denial notice and confirmed case facts. The patient and treating clinician must verify the governing review rule, current payer policy, clinical sources, attachments, destination, and deadline.
CARC 256 group codes explained
On the 835 ERA, CARC 256 appears alongside a group code that signals who is financially responsible for the adjustment. CO (Contractual Obligation) — Contractual write-off. The provider agreed to the rate. Patient does NOT owe this amount.
Frequently asked questions
What does CARC 256 mean?
Service not payable per managed care contract. In plain language: The Medicare Advantage or Medicaid MCO plan's contract specifically excludes or doesn't cover this service.
Is CARC 256 appealable?
Yes — CARC 256 is one of the codes that commonly supports an appeal. Appeal under MA grievance/appeal rights (42 CFR 422 Subpart M) or Medicaid MCO appeal process (42 CFR 438 Subpart F). Both require expedited timelines for urgent care.
Which group code does CARC 256 appear under?
CARC 256 most often appears under: CO (Contractual Obligation) — Contractual write-off. The provider agreed to the rate. Patient does NOT owe this amount.
When does CARC 256 typically appear on a denial?
Common scenarios: MA plan denies what Original Medicare covers; Medicaid MCO carve-out; Out-of-network MA emergency.
How do I appeal a CARC 256 denial?
Appeal under MA grievance/appeal rights (42 CFR 422 Subpart M) or Medicaid MCO appeal process (42 CFR 438 Subpart F). Both require expedited timelines for urgent care.
Related resources
Sources
Appeal a CARC 256 denial
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