CARC 200: Expenses Incurred During Lapse in Coverage

What it means

This denial means the payer has determined that the patient's insurance policy was not active on the date(s) of service billed. In other words, there was a gap between when prior coverage ended and new coverage began (or coverage was reinstated after a lapse), and the service fell into that gap.

Common causes

Patient's policy was terminated for non-payment of premiums and later reinstated, leaving a gap in active coverage
Service date falls between the end of one policy period and the effective date of a new or renewed policy
Coverage was retroactively cancelled (rescinded) after the claim was submitted
Incorrect or outdated insurance information on file at time of service
Patient changed plans or employers and there was a delay in the new coverage becoming effective

How to fix it

Verify the exact effective and termination dates of the patient's coverage directly with the payer
Confirm the date of service against the eligibility span to see if there truly was a lapse
Ask the patient if they have other insurance that was active during the lapse period (e.g., COBRA, a new employer plan, or secondary coverage)
If the lapse was due to reinstatement, request documentation showing retroactive reinstatement that covers the date of service and resubmit with that proof
If the policy information was outdated, update patient demographics/insurance and rebill with corrected information
If no coverage applies, transition the balance to the patient or another responsible payer according to your practice's billing policies

Appeal / resubmit

If you have documentation showing the policy was reinstated retroactively to include the date of service, or that the payer's eligibility records are inaccurate, submit a written appeal with the eligibility verification printout, reinstatement letter, or policy documents as supporting evidence. Include the original claim, the denial notice, and a clear explanation of the discrepancy. Appeals are more likely to be reviewed favorably when timely, well-documented proof of active coverage is provided, but outcomes depend on the payer's review and policy terms.

Related codes

Frequently asked

Does this mean the patient has no insurance at all?

Not necessarily. It means the payer found no active coverage for the specific date of service billed. The patient may have other coverage, or the lapse may be a records error.

What should I ask the patient first?

Ask whether they had any other insurance during the service date, whether their policy lapsed and was later reinstated, and whether they can provide updated insurance cards or verification letters.

Can this denial be corrected without an appeal?

Yes, if updated or corrected insurance information resolves the eligibility issue, you can often simply rebill with the correct payer or policy details rather than filing a formal appeal.

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This content is for informational purposes only and does not constitute billing or legal advice. Always verify current payer policies and consult qualified billing or legal professionals as needed.