CARC 223 – Mandated Federal, State, or Local Law/Regulation Adjustment

What it means

This code is used when a claim adjustment is required because of a specific federal, state, or local law or regulation, and no other, more specific adjustment code applies. It's essentially a catch-all for legally mandated payment changes that don't fit elsewhere.

Common causes

A state or federal mandate requires a specific payment adjustment not captured by existing codes
Regulatory fee schedules or payment rules unique to a jurisdiction are being applied
Legislation (e.g., surprise billing laws, state-specific reimbursement caps) is affecting the allowed amount
Payer system applying a compliance-driven adjustment tied to a new or updated regulation

How to fix it

Review the remittance advice remarks (RARC codes) paired with CARC 223 for more detail on which regulation applies
Contact the payer to ask which specific law or regulation triggered the adjustment
Check state insurance department or CMS guidance if the adjustment relates to a known regulatory change
Verify that your contract and billing practices align with the cited regulation
Document the regulatory basis provided by the payer for your records and future claims

Appeal / resubmit

Because this code points to a legal or regulatory requirement, appeals should focus on verifying whether the cited law or regulation actually applies to the specific claim circumstances. Request the payer specify the exact statute, regulation, or mandate in writing. If the mandate doesn't apply to your situation (e.g., wrong state, wrong plan type, or outdated regulation), submit a reconsideration with supporting documentation.

Related codes

Frequently asked

What does CARC 223 mean on my remittance advice?

It means the payer adjusted your claim because of a federal, state, or local law or regulation that isn't already described by another denial code.

How do I find out which law or regulation caused this adjustment?

Check any accompanying RARC remark codes for more detail, and if that's insufficient, contact the payer directly to ask which specific regulation was applied.

Can CARC 223 be appealed?

Yes, if you believe the regulation cited does not apply to your claim or was misapplied, you can request a reconsideration or appeal with supporting documentation.

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This information is for general educational purposes only and does not constitute billing or legal advice. Always verify current payer policies and applicable regulations.