CARC 167: This (these) diagnosis(es) is (are) not covered

What it means

The payer is saying that the diagnosis code(s) submitted on the claim are not covered under the patient's plan, or don't meet the payer's coverage criteria for the billed service. This is different from a coding error — the diagnosis itself is excluded from coverage, often because of plan-specific exclusions, medical necessity policies, or the diagnosis not matching what's required for the procedure billed.

Common causes

Plan has a specific exclusion for the diagnosis (e.g., certain congenital conditions, cosmetic-related diagnoses, or experimental treatment diagnoses)
Diagnosis code does not support medical necessity for the billed procedure per payer policy (e.g., LCD/NCD mismatch)
Diagnosis is not covered under the specific plan type (e.g., excluded conditions in a limited-benefit or short-term plan)
Incorrect or outdated diagnosis code submitted that doesn't reflect the patient's actual condition
Diagnosis linked to a service that requires a different, more specific code not on the payer's covered list
Claim submitted with a diagnosis that is inconsistent with the patient's age, gender, or other demographic requirements

How to fix it

Review the payer's coverage policy, LCD/NCD, or medical policy for the specific diagnosis and procedure combination billed
Confirm the diagnosis code is current, accurate, and supported by clinical documentation in the medical record
Check whether a more specific or alternate diagnosis code exists that better reflects the patient's condition and is covered
Verify the patient's plan benefits to confirm whether the diagnosis is truly excluded from coverage
If the diagnosis was miscoded, correct it and resubmit the claim with supporting documentation
If the diagnosis is accurate but excluded by the plan, discuss self-pay or alternative billing options with the patient
Contact the payer for clarification on their specific coverage criteria if the reason for denial is unclear

Appeal / resubmit

If you believe the diagnosis was coded correctly and should be covered, submit a written appeal with supporting clinical documentation (progress notes, test results, physician orders) demonstrating medical necessity and how the diagnosis aligns with the billed service. Reference the payer's own coverage policy or LCD/NCD if it supports your case. If the diagnosis was miscoded, correct and resubmit as a corrected claim rather than an appeal, following payer-specific timely filing rules.

Related codes

Frequently asked

Does this mean the diagnosis code was entered incorrectly?

Not necessarily. It usually means the diagnosis, as submitted, isn't covered by the payer for the service billed — this could be due to a plan exclusion, a policy requirement, or an actual coding error. Review the claim details and payer policy to determine which applies.

Can this denial be fixed with a corrected claim?

If the diagnosis was inaccurate or a more specific code applies, a corrected claim with the right diagnosis may resolve the issue. If the diagnosis is accurate but genuinely excluded by the plan, a corrected claim won't help — you may need to appeal or discuss alternative billing with the patient.

Should I bill the patient if this diagnosis is not covered?

Check your payer contract and any required patient notices (such as an ABN, where applicable) before billing the patient. Coverage exclusions and patient responsibility rules vary by payer and plan.

More free billing tools: all denial codes · denial lookup · Medicare fee calculator

This content is informational only and does not constitute billing or legal advice. Coverage determinations depend on the specific payer, plan, and clinical documentation.