CARC Code
120
Patient is covered by a managed care plan.
How to resolve this denial
Verify network provider status; obtain retroactive authorization or appeal
- 1
Review the plan's Summary of Benefits to confirm the service is excluded
- 2
Inform the patient in writing that the service is not covered under their plan
- 3
Determine if an ABN was issued prior to service (required for Medicare)
- 4
Bill the patient for the non-covered service if an ABN was signed
- 5
Document the non-coverage determination in the patient account
▶✓ Pre-action checklist — verify before contacting the payer
Review the full remittance advice (ERA/EOB) for additional RARC codes that explain the denial.
Verify the claim was submitted with correct patient eligibility and benefit information.
Check if this denial applies to a specific line item or the entire claim.
▶More about CO-120 — stats, related codes, appeal template
35%
Recovery Rate
21-45 days
Avg. Resolution
Hard
Difficulty
Occasional
Frequency
Payer-Specific Notes
How major payers handle CARC 120 by specialty.
Blue Cross Blue Shield
BCBS requires appeal submission within 180 days for most plans.
Common 835 Combinations
CARC 120 most often appears with these Group Code + RARC combinations on 835 remittances.
Appeal Letter Template
Generic appeal template for CARC 120 denials.
We are submitting a formal appeal for claim [CLAIM_NUMBER] for patient [PATIENT_NAME], date of service [DOS]. This claim was denied/adjusted with CARC 120 indicating: "Patient is covered by a Managed Care Plan. All services must be rendered by plan." We have reviewed the claim and are providing the attached documentation to support reconsideration. [SUPPORTING_DOCUMENTATION]. Please reconsider payment per the terms of our contract.
Need to resolve this denial?
Get a step-by-step resolution plan with payer-specific guidance and appeal letter generation.
Resolve this denial →