Medical Necessity
AR Guide KnowledgeDenials where the payer determined services were not medically necessary or reasonable per its policy.
Denial Decoder
Run this denial through the decoder
Enter the codes from your ERA/EOB and get this workflow with the exact CARC/RARC on your line.
Check first
Check these before anything else
- The payer's cited policy or guideline
- Clinical documentation for the date of service
- Service-to-criteria match, point by point
- Prior authorization status
- Frequency / level of service billed
- CARC 50 / 150 / 151 and the accompanying remark code
Verify payer-specific rules: Heads up
AR Guide knowledge
What it means
The payer applied a coverage policy or clinical guideline and concluded the service was not medically necessary for the member's condition. The denial must be based on a defined policy — if the payer cannot cite one, that is grounds to push back. Success usually depends on clinical documentation that addresses the specific criteria cited.
AR Guide knowledge
Common causes
- Clinical documentation does not support the level of care
- Service does not meet the payer's medical policy criteria
- Missing clinical documentation at the time of review
- Frequency or level of service not supported by the record
- Service deemed experimental or investigational
AR Guide knowledge
What AR should verify
- Review the payer's medical policy or coverage determination cited in the denial
- Confirm the clinical documentation supports the service
- Check whether a prior authorization would have prevented the denial
- Ask the payer to cite the specific policy or guideline used
- Compare the service to the policy's criteria point by point
Recommended workflow
What to do next
- Appeal with clinical documentation that addresses the cited criteria
- Reference the applicable policy in the appeal
- If the payer cannot cite a policy, escalate — denials must be based on a defined policy
- For experimental denials, gather peer-reviewed evidence supporting the service
Don’t assume
Avoid these shortcuts
- The denial is final — medical necessity denials are often appealable with documentation
- The documentation on file supports the level billed
- The payer must accept an appeal without a cited policy
- A previous denial of the same service means this one will be denied too
- Physician notes alone satisfy the payer's criteria
AR Guide knowledge
Documentation
- Clinical notes and records for the date of service
- The payer's cited policy and the criteria met
- Peer-reviewed literature for experimental/investigational appeals
- Any prior authorization or approval documentation
AR Guide knowledge
Escalation
- Clinical: obtain physician-to-physician review or supporting documentation
- Coding: confirm the code and level match the documentation
- Appeals: when the payer applies a policy inconsistently or cannot cite one
- Supervisor: when denials recur on a specific policy
QA checkpoint
Confirm before closing
- Attach supporting clinical documentation on the first appeal
- Track denial reasons by payer and policy to spot patterns
- Verify the payer cites a specific policy before appealing
AR Guide knowledge
Related guides
Reference
Related codes
CARCs
CARC50These are non-covered services because this is not deemed a 'medical necessity' by the payer. Usage: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.CARC55Procedure/treatment/drug is deemed experimental/investigational by the payer. Usage: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.CARC150Payer deems the information submitted does not support this level of service.CARC151Payment adjusted because the payer deems the information submitted does not support this many/frequency of services.CARC167This (these) diagnosis(es) is (are) not covered. Usage: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.
RARCs
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.RARCN29Missing documentation/orders/notes/summary/report/chart.
Source & review
References
AR Guide editorial research · Last reviewed Aug 15, 2026 · Reviewed. General practice guidance — not official payer or standards documentation. Payer-specific requirements must be verified with the payer.
About this guidance: Note