How do I resolve a CO-256 denial?

Review the full denial on the 835 ERA for CARC 256: "Service not payable per managed care contract." Pull the original claim and all supporting documentation for the date of service. See full resolution steps at tryarceum.com.

Can I appeal a CO-256 denial?

CO-256 denials are generally not appealable. This is a contractual limitation agreed upon between the provider and payer, not a claim processing error or medical necessity issue.

CARC Code

256

🟡 Soft Denial

Not Payable Under Managed Care Contract

The service you provided is not covered or not payable according to the terms of the managed care agreement between the provider and the health plan. This is a contractual limitation, not a patient benefit issue.

contractual

Resolution: 85%Easy difficulty3-7 days avg

How to resolve this denial

Which payer denied this claim?

Review and resolve CARC 256: Service not payable per managed care contract.

1
Review the full denial on the 835 ERA for CARC 256: "Service not payable per managed care contract."
2
Pull the original claim and all supporting documentation for the date of service.
3
Identify the specific data element, policy requirement, or documentation gap that triggered this adjustment.
4
Correct the identified issue — update claim data, gather missing documentation, or verify coverage details.
5
Resubmit as a corrected claim (frequency type 7) or file a written appeal with supporting documentation.
6
Follow up with the payer within 10-15 business days to confirm adjudication.

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▶✓ 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-256 — stats, related codes, appeal template

85%

Recovery Rate

3-7 days

Avg. Resolution

Easy

Difficulty

Rare

Frequency

Payer-Specific Notes

How major payers handle CARC 256 by specialty.

General

Confirm payer-specific policy for CARC 256 and submit corrected claim or appeal as appropriate.

Appeal Letter Template

Generic appeal template for CARC 256 denials.

Dear [Payer Name] Appeals Department, We are writing to appeal the denial of claim [CLAIM #] for patient [PATIENT NAME] (Member ID: [ID]) for services rendered on [DATE OF SERVICE]. The claim was denied with CARC 256: "Service not payable per managed care contract." We believe this denial is in error for the following reasons: [INSERT CLINICAL/ADMINISTRATIVE JUSTIFICATION] We respectfully request reconsideration and payment of this claim. Sincerely, [Provider Name / Billing Contact]

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