Medical Billing Terms C: CARC Codes, CAQH and Category CPT Codes

This page defines CARC codes (claim adjustment reason codes) and the other medical billing terms from CAHPS to charge capture, including CAQH, capitation, CPT categories and CCBHC. Each entry gives a plain definition, why it matters, an example, and an official source. MCM South Medical Billing Service, LLC works only in mental and behavioral health billing.

Last reviewed: October 10, 2026Sources linked at each term

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Billing Terms Glossary slide, Terms C: CARC Codes - MCM South Medical Billing Service, LLC

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On this page (23 terms)

CAHPS
Calendar Year Deductible
Cancellation Rate
Capitation
CAQH
CAQH CORE
CAQH ProView
CAQH ProView Data Sharing
CARC (Claim Adjustment Reason Code)
Card on File
Care Gap
Care Management
Care Management Organization (CMO)
CareFirst
Carelon Behavioral Health
Category I CPT Code
Category II CPT Code
Category III CPT Code
Centene
CERT (Comprehensive Error Rate Testing)
Certified Community Behavioral Health Clinic (CCBHC)
Change Healthcare
Charge Capture

How to use these CARC Codes definitions

Use this page as a quick reference for CARC Codes, from CAHPS to Charge Capture. Each entry gives a plain definition, why it matters to a mental health practice, and an official source. When a rule changes by payer or state, the entry says so, so confirm CARC Codes details with the payer before you bill.

Checklist: put the carc codes definitions to work

Check the carc codes entries above before you send a claim that depends on them.
Share this carc codes page with front-desk and billing staff so everyone works from the same definitions.
When a payer letter mentions carc codes, find the matching entry and note the date you checked it.
Keep your carc codes notes next to your payer contracts, because a contract can define a term differently.
Ask the payer to confirm in writing how it applies carc codes before you change a workflow.
Train new staff on carc codes first, then move on to the rest of the glossary.
Log any carc codes question that comes up twice, then add the answer to your billing procedures.
Use the source links under the carc codes entries to confirm the current rule.
Print the carc codes entries you use most and keep them at the billing desk.

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CAHPS

General (all payers)

Also called Consumer Assessment of Healthcare Providers and Systems

Definition: Standardized surveys of patient experience with care.
Why it matters: Feeds quality and payment programs.
Illustrative example: A plan surveys members about access to behavioral health care.

Related termsHEDIS Star Ratings

Reference sourceCMS (Centers for Medicare & Medicaid Services)checked 10/9/26

CategoriesQuality & Risk Adjustment Terms

Calendar Year Deductible

General (all payers)

Also called CYD

Definition: A deductible that resets every January 1.
Why it matters: Helps time patient collections and explains January payment changes.
Illustrative example: A patient's deductible resets in January and copays shift.

Related termsDeductible Plan Year

Reference sourceCMS (Centers for Medicare & Medicaid Services)checked 10/9/26

CategoriesEligibility & Benefits

Cancellation Rate

General (all payers)

Also called late cancellation rate

Definition: The percentage of appointments canceled, including short-notice cancellations.
Why it matters: Shows schedule stability.
Illustrative example: A practice tracks late cancels by clinician.

Related termsNo-Show Rate Utilization Rate

Reference sourceMGMAchecked 10/9/26

CategoriesRevenue Cycle Metrics

Capitation

General (all payers)

Also called capitated payment; PMPM

Definition: A payment model in which a provider or organization is paid a fixed amount per member for a period, regardless of services used.
Why it matters: Shifts financial risk to providers and changes billing to encounter reporting.
Illustrative example: A behavioral health organization receives a per-member monthly payment.

Reference sourceCMS (Centers for Medicare & Medicaid Services)checked 10/9/26

CategoriesValue-Based Care Terminology Payment & Reimbursement

CAQH

General (all payers)

Also called Council for Affordable Quality Healthcare; CAQH Solutions

Definition: A nonprofit alliance of health plans and related organizations. Its ProView tool and CORE operating rules are widely used for provider data and administrative simplification.
Why it matters: Most commercial payers pull provider data from CAQH, so an out-of-date profile delays credentialing.
Illustrative example: A payer says, 'We will pull your information from CAQH once you authorize us.'

Related termsCAQH ProView CAQH CORE Attestation

Reference sourceCAQHchecked 10/9/26

CategoriesCredentialing & Enrollment Provider Data Management Terms

CAQH CORE

General (all payers)

Also called Committee on Operating Rules for Information Exchange; operating rules

Definition: A set of operating rules from DataSpring (formerly CAQH) for administrative transactions such as eligibility and claim status. They add detail on top of HIPAA transaction standards.
Why it matters: Explains why some payers return certain response times or data elements in eligibility checks.
Illustrative example: An eligibility response arrives in the format defined by the CORE rule.

Reference sourceDataSpring (formerly CAQH)WEDIchecked 10/9/26

CategoriesEDI & Clearinghouse Terms Credentialing & Enrollment

CAQH ProView

General (all payers)

Also called ProView; CAQH profile; CAQH credentialing application

Definition: CAQH's online system where providers enter credentialing and practice data once and authorize payers to view it.
Why it matters: An incomplete or unauthorized profile is a top cause of credentialing delays.
Illustrative example: A therapist adds licenses, malpractice coverage, and work history to ProView, then authorizes each payer.

Reference sourceDataSpring (formerly CAQH)checked 10/9/26

CategoriesCredentialing & Enrollment Provider Data Management Terms EHR & Healthcare Technology Terms

CARC (Claim Adjustment Reason Code)

General (all payers)

Also called CARC; claim adjustment reason code; denial code

Definition: A standard code on an ERA that explains why a claim payment was adjusted or denied.
Why it matters: Reading CARCs correctly points to the fix: correct and resubmit, appeal, or write off.
Illustrative example: CARC 16 signals missing or incorrect information on the claim.

Reference sourceX12checked 10/9/26

CategoriesDenials & Appeals EDI & Clearinghouse Terms

Card on File

General (all payers)

Also called credit card on file; stored payment method

Definition: A patient's payment card securely stored, with written consent, for future charges such as copays and no-show fees.
Why it matters: Improves collections but requires consent and secure handling.
Illustrative example: A client signs an agreement allowing a copay to be charged after each session.

Related termsPayment Plan No-Show Fee

Reference sourceHFMAchecked 10/9/26

CategoriesPatient Financial Responsibility Terms

Care Gap

General (all payers)

Also called quality gap; gap in care

Definition: A recommended service or measure that has not been documented as completed for a patient.
Why it matters: Payers use gap lists to target outreach and incentives.
Illustrative example: A plan lists a member who has no follow-up visit after hospitalization.

Related termsHEDIS Pay for Performance (P4P)

Reference sourceNCQAchecked 10/9/26

CategoriesQuality & Risk Adjustment Terms Value-Based Care Terminology

Care Management

General (all payers)

Also called chronic care management; care coordination

Definition: Services that coordinate a patient's care across providers, sometimes billed with monthly codes when requirements are met.
Why it matters: Supports value-based care and can produce additional revenue where covered.
Illustrative example: A care manager tracks patient outreach and time.

Reference sourceCMS (Centers for Medicare & Medicaid Services)checked 10/9/26

CategoriesValue-Based Care Terminology

Care Management Organization (CMO)

Medicaid (state-specific)

Also called CMO; Georgia CMO

Definition: Georgia's term for the private plans that manage Medicaid and PeachCare for Kids benefits.
Why it matters: Each CMO has its own rules and portal.
Illustrative example: A therapist credentials with each CMO.

Reference sourceMedicaid.govchecked 10/9/26

CategoriesMedicare & Medicaid Terms BCBS, UHC & Commercial Payer Terms

CareFirst

Private payer

Also called CareFirst BlueCross BlueShield

Definition: A Blue licensee serving Maryland, the District of Columbia, and parts of Virginia.
Why it matters: A separate licensee with its own rules.
Illustrative example: A provider credentials with CareFirst separately.

Reference sourceCareFirstchecked 10/9/26

CategoriesBCBS, UHC & Commercial Payer Terms

Carelon Behavioral Health

Private payer

Also called Carelon; Beacon Health Options legacy

Definition: A behavioral health business within Elevance Health that manages behavioral health benefits for some plans.
Why it matters: A credentialing and claims contact for some Anthem behavioral health members.
Illustrative example: A provider is credentialed with the behavioral health administrator for a plan.

Reference sourceElevance Healthchecked 10/9/26

CategoriesBCBS, UHC & Commercial Payer Terms Behavioral Health Specific Terms

Category I CPT Code

General (all payers)

Also called Category I code; CPT Category I; established procedure code

Definition: A Category I CPT code is a five-digit code, from 00100 through 99499, that describes an established procedure or service. Psychotherapy and E/M codes are examples.
Why it matters: Most of what a practice bills is Category I. Payers pay on Category I codes according to their own policies.
Illustrative example: Codes such as 90834 and 99213 are Category I codes.

Reference sourceAMA, CPT code set overview AMA, CPT Editorial Panel and code approvalchecked 10/9/26

CategoriesClaims Processing

Category II CPT Code

General (all payers)

Also called Category II code; CPT Category II; performance measurement code; tracking code

Definition: A Category II CPT code is an alphanumeric tracking code that supports performance measurement. Category II codes are supplemental and are used to collect data on quality of care.
Why it matters: They usually carry no payment and are reported for quality programs. Practices may report them to meet payer or program measures.
Illustrative example: A practice reports a Category II code for a depression screening result to support a quality measure.

Reference sourceAMA, CPT code set overview AMA, CPT Editorial Panel and code approvalchecked 10/9/26

CategoriesClaims Processing Quality & Risk Adjustment Terms

Category III CPT Code

General (all payers)

Also called Category III code; CPT Category III; emerging technology code

Definition: A Category III CPT code is a temporary alphanumeric code for new and developing technology, procedures, and services. It lets the AMA and others track and evaluate emerging services.
Why it matters: Payers often treat Category III codes as investigational and may not pay for them. Check the payer's policy before you bill.
Illustrative example: A practice asks a payer whether it covers a Category III code for a new digital mental health service.

Reference sourceAMA, CPT code set overview AMA, CPT Editorial Panel and code approvalchecked 10/9/26

CategoriesClaims Processing AI & Healthcare Automation Terms

Centene

Private payer

Also called Centene Corporation

Definition: A national managed care company focused on government programs, with subsidiaries that run Medicaid, Medicare, and marketplace plans.
Why it matters: Its subsidiaries have their own state plans and rules.
Illustrative example: A provider contracts with a Centene subsidiary plan in a state.

Reference sourceCentenechecked 10/9/26

CategoriesBCBS, UHC & Commercial Payer Terms

CERT (Comprehensive Error Rate Testing)

General (all payers)

Also called CERT; improper payment measurement

Definition: A CMS program that measures improper payments in Medicare fee-for-service through claim sampling.
Why it matters: Drives CMS education and policy emphasis.
Illustrative example: A provider receives a CERT records request.

Reference sourceCMS (Centers for Medicare & Medicaid Services)checked 10/9/26

CategoriesAudits & Compliance Medicare & Medicaid Terms

Certified Community Behavioral Health Clinic (CCBHC)

General (all payers)

Also called CCBHC

Definition: A clinic model certified under federal criteria that offers a defined set of behavioral health services and is paid through special payment methods in participating states.
Why it matters: Payment and billing differ from standard outpatient clinics.
Illustrative example: A CCBHC in a participating state is paid under a state-defined payment method.

Reference sourceSAMHSAchecked 10/9/26

CategoriesBehavioral Health Specific Terms Medicare & Medicaid Terms

Change Healthcare

General (all payers)

Also called Change Healthcare clearinghouse

Definition: A health care technology and clearinghouse company, part of Optum under UnitedHealth Group, whose systems were disrupted by a cyberattack in February 2024. Listed for reference; not an endorsement or partnership.
Why it matters: Illustrates concentration risk in claim flows.
Illustrative example: A practice reviews its dependence on one clearinghouse.

Reference sourceChange Healthcarechecked 10/9/26

CategoriesEDI & Clearinghouse Terms

Charge Capture

General (all payers)

Also called missed charges; charge reconciliation

Definition: Ensuring all delivered services are recorded and billed.
Why it matters: Missed charges are lost revenue.
Illustrative example: A biller reconciles the schedule with submitted claims.

Related termsRevenue Leakage Charge Lag

Reference sourceHFMAchecked 10/9/26

CategoriesRevenue Cycle Metrics

Quick answer: CARC Codes

What is a CARC code?

CARC (Claim Adjustment Reason Code) is a standard code on an ERA that explains why a claim payment was adjusted or denied. Reading CARCs correctly points to the fix: correct and resubmit, appeal, or write off.

Frequently asked questions: CARC Codes

What is CAQH ProView?

CAQH's online system where providers enter credentialing and practice data once and authorize payers to view it. An incomplete or unauthorized profile is a top cause of credentialing delays.

What is capitation in medical billing?

Capitation is a payment model in which a provider or organization is paid a fixed amount per member for a period, regardless of services used. Shifts financial risk to providers and changes billing to encounter reporting.

What is a CCBHC?

Certified Community Behavioral Health Clinic (CCBHC) is a clinic model certified under federal criteria that offers a defined set of behavioral health services and is paid through special payment methods in participating states. Payment and billing differ from standard outpatient clinics.

Related resources

Where MCM South works

MCM South serves psychotherapists and psychiatrists in ten states: Georgia, Massachusetts, Connecticut, Texas, Florida, New York, Colorado, Tennessee, North Carolina and Illinois.

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