AGAR Guide
CARC167ReferenceCurrentVerified Aug 15, 2026

CARC 167

AR Guide workflow

Step-by-step: Medical Necessity

✓ Workflow verified Aug 15, 2026 · Verified via review of official sources and AR Guide practice testing — not payer policy. View the full guide

  1. VerifySteps 1–11

    1. The payer's cited policy or guideline

    2. Clinical documentation for the date of service

    3. Service-to-criteria match, point by point

    4. Prior authorization status

    5. Frequency / level of service billed

    6. CARC 50 / 150 / 151 and the accompanying remark code

    7. Review the payer's medical policy or coverage determination cited in the denial

    8. Confirm the clinical documentation supports the service

    9. Check whether a prior authorization would have prevented the denial

    10. Ask the payer to cite the specific policy or guideline used

    11. Compare the service to the policy's criteria point by point

  2. ActSteps 12–15

    1. Appeal with clinical documentation that addresses the cited criteria

    2. Reference the applicable policy in the appeal

    3. If the payer cannot cite a policy, escalate — denials must be based on a defined policy

    4. For experimental denials, gather peer-reviewed evidence supporting the service

  3. Document & QASteps 16–22

    1. Clinical notes and records for the date of service

    2. The payer's cited policy and the criteria met

    3. Peer-reviewed literature for experimental/investigational appeals

    4. Any prior authorization or approval documentation

    5. Attach supporting clinical documentation on the first appeal

    6. Track denial reasons by payer and policy to spot patterns

    7. Verify the payer cites a specific policy before appealing

Appeal with documentation that meets the cited criteria: Heads up

Medical-necessity denials are documentation-driven: the payer applied a specific policy, and the appeal wins by addressing its criteria point by point — not by resubmitting the same claim.

If you take the wrong path: A bare resubmission is denied again. A first appeal without the supporting clinical documentation wastes the strongest appeal you have.

AR Guide explanation

What it means

The diagnosis or diagnoses submitted are not covered.

AR Guide knowledge

Common denial category

Medical Necessity — The payer determined the service was not medically necessary or reasonable according to its policy. These denials are documentation-driven.

AR Guide knowledge

Most common causes

  • Diagnosis excluded by the plan or policy
  • Diagnosis does not meet coverage criteria

AR Guide knowledge

Action in your PM/EMR system

In your PM system: route the claim to your appeals queue with the clinical documentation attached. Do not resubmit the same claim — pull the payer's cited policy and map your documentation to its criteria.

Illustrative scenario

Real-world example

A level-4 visit was denied with CARC 50 because the documentation did not support the level. The appeal attached the full note mapped to the payer's criteria and the level was upheld on reconsideration.

Example — not a claim about any specific payer or account.

AR Guide knowledge

What AR should verify

  1. Identify the excluded diagnosis
  2. Review the plan/policy coverage criteria for the diagnosis

AR Guide knowledge

Recommended action

  1. Appeal with clinical documentation supporting the diagnosis
  2. If the diagnosis code is wrong, correct and resubmit

Appeal template

No code-specific template yet

No downloadable template targets CARC 167 specifically. Browse all appeal letter templates — or follow the recommended workflow above.

About this guidance: Note

AR Guide knowledge is general reference content written by our team — it is not payer-specific policy and never replaces the payer’s documentation or your contract. Always confirm specifics with the payer.

Priority 2

Commonly paired RARCs

RARCs commonly accompany CARC 167 on the ERA/EOB. Select the one on your line to focus the workflow, or use the list as a lookup.

  • RARCN130Consult plan benefit documents/guidelines for information about restrictions for this service.Pull the specific plan benefit document and quote the exact restriction in your appeal — a general appeal without the plan language rarely succeeds here.
  • RARCM76Missing/incomplete/invalid diagnosis or condition.
  • RARCN386This decision was based on a National Coverage Determination (NCD). An NCD provides a coverage determination as to whether a particular item or service is covered. Visit CMS.gov and search for Medicare Coverage Database to find a copy of the policy.Review the cited NCD. If the service meets the NCD conditions, appeal with documentation showing each condition is satisfied.
  • RARCN29Missing documentation/orders/notes/summary/report/chart.Send the requested documentation through the payer's preferred channel and reference the claim number. Track the submission so it can be proven later.

Priority 3

Payer-specific nuance

How major payers handle this denial — what AR Guide has verified, and what you must confirm with the payer. We never publish payer handling we have not verified.

Medicare

Medical necessity is judged against each payer's specific policy and clinical criteria. Ask the payer to cite the policy used, then verify your documentation addresses its criteria point by point in the appeal.

Medicaid

Medical necessity is judged against each payer's specific policy and clinical criteria. Ask the payer to cite the policy used, then verify your documentation addresses its criteria point by point in the appeal.

UnitedHealthcare

Medical necessity is judged against each payer's specific policy and clinical criteria. Ask the payer to cite the policy used, then verify your documentation addresses its criteria point by point in the appeal.

Aetna

Medical necessity is judged against each payer's specific policy and clinical criteria. Ask the payer to cite the policy used, then verify your documentation addresses its criteria point by point in the appeal.

Cigna

Medical necessity is judged against each payer's specific policy and clinical criteria. Ask the payer to cite the policy used, then verify your documentation addresses its criteria point by point in the appeal.

Anthem (BCBS)

Medical necessity is judged against each payer's specific policy and clinical criteria. Ask the payer to cite the policy used, then verify your documentation addresses its criteria point by point in the appeal.

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