CARC 20: Injury/Illness Covered by Liability Carrier

What it means

The payer is denying the claim because they've determined that a liability insurance carrier (not this payer) is responsible for paying for this injury or illness. This typically happens with auto accidents, slip-and-falls, workplace injuries, or other incidents where a third party or their insurer may be legally responsible for the costs.

Common causes

Claim relates to an auto accident, workers' comp incident, premises liability case, or other third-party injury situation
Patient intake forms or diagnosis codes indicate an accident or injury with potential third-party involvement
The payer's coordination of benefits (COB) records show an open liability claim for this patient
Diagnosis coding (e.g., certain injury or external cause codes) triggered automatic liability review
The claim was submitted to the health plan before liability/no-fault coverage was exhausted or resolved
Missing or incomplete accident details that would have clarified the health plan's secondary/excluded role

How to fix it

Confirm whether a liability claim (auto, workers' comp, premises, etc.) actually exists for this date of service and injury
Contact the patient to identify any liability carrier, claim number, or attorney involved in the incident
If a liability carrier is confirmed, submit the claim to that carrier with appropriate accident/injury documentation
If no liability case exists or it has been resolved/denied, obtain documentation (e.g., liability carrier's denial letter) and resubmit to the health plan with that proof
Verify and correct diagnosis codes if they inaccurately suggest an accident-related injury when one didn't occur
Update the patient's coordination of benefits (COB) information with the payer if liability case has closed
Check whether state no-fault or workers' comp rules require exhausting those benefits first before billing the health plan

Appeal / resubmit

If you believe this is not a liability case, submit an appeal with a written statement from the patient confirming no third-party liability claim exists, along with any police report, incident report, or employer statement clarifying the cause of injury. If a liability carrier was involved but has since denied or closed the claim, include their denial letter or closure notice as supporting documentation. Keep a clear timeline of the incident and any related claims to streamline the review process.

Related codes

Frequently asked

Does this mean my claim will never be paid?

Not necessarily. It means this particular payer believes another entity (a liability carrier) should pay first. Once liability is clarified or resolved, the claim may be reprocessed or submitted to the correct payer.

What if there's no actual liability case for this patient?

You'll need to provide documentation showing no liability claim exists, such as a patient statement or clarification of the diagnosis, and request reprocessing by the original health plan.

Who is responsible for identifying the liability carrier?

Typically the billing office works with the patient to gather liability carrier details, claim numbers, and accident information needed to redirect the claim appropriately.

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

This content is for informational purposes only and does not constitute billing, legal, or reimbursement advice. Always verify requirements with the specific payer and consult qualified professionals as needed.