Official X12 description
“Rent/purchase guidelines were not met.”
Source: X12 Claim Adjustment Reason Codes. The X12 External Code Lists are the single authoritative source for every CARC descriptor — always verify against the current release before building a claim-scrub rule.
What CARC 108 actually means
CARC 108 denies DMEPOS claims where the rent-vs-purchase guidelines weren't followed — a rental billed past the cap-rental period, or a purchase billed when the item should have been capped-rental.
Common root causes
- Capped-rental rules (CMS) not followed for DMEPOS.
- Incorrect KH/KI/KJ modifier sequencing.
Prevention checklist
- DMEPOS claim edits that enforce rental-month counters.
- Capped-rental modifier automation.
Appeal strategy — step by step
Most CARC 108 denials clear faster with the right remediation than with a formal appeal. Work the steps in order and escalate only when a lower-effort path has been ruled out.
- 1Correct the modifier sequence and resubmit.
- 2Appeal with the rental history if the payer's count is wrong.
Sample appeal-letter language for CARC 108
Edit the bracketed fields before sending. This template is a starting point; a payer-specific appeal form may still be required — check the provider portal first.
Payer-specific notes
Payer-specific behavior for CARC 108 publishes here as the QuickIntell anonymized denial ETL ingests sufficient volume. In the meantime, consult the payer directory for the relevant provider manual and appeal form.
How common is CARC 108?
Out of 306 seeded CARCs, ranked by combined US monthly search volume for "CARC 108", "CO-108 denial", and "denial code 108".
Platform frequency ranks publish once the anonymized denial-rate pipeline reaches the publication threshold (strategy §12 Phase 2).
How QuickRCM prevents CARC 108
QuickRCM catches the root causes above before the 837 leaves the clearinghouse:
- Claim-scrub rules fire on every root cause listed above — the scrub references the same X12 CAS segment logic that drives the denial, so what the payer checks, QuickRCM checks first.
- When a denial lands, QuickRCM routes it to the correct worker with the documentation bundle already attached (op note, LCD citation, modifier rationale, EOB, primary 835).
- Appeal templates tuned to each CARC (including this one) pull the supporting facts from the claim and fill the bracketed fields automatically.
CAQH CORE code combinations for CARC 108
Under the CAQH CORE Payment and Remittance Uniform Use rule, health plans may pair CARC 108 only with the remark codes and group codes below for the defined business scenario 3 (Billed service not covered by the health plan). A combination outside this list on an 835 is itself a payer compliance issue worth raising.
| RARC | Remark description | Group code | Scenario |
|---|---|---|---|
| (no RARC) | CARC used without a remark code | CO, PI or PR | 3 |
| M7 | No rental payments after the item is purchased, returned or after the total of issued rental payments equals the purchase price. | CO, PI or PR | 3 |
| M10 | Equipment purchases are limited to the first or the tenth month of medical necessity. | CO, PI or PR | 3 |
| M25 | The information furnished does not substantiate the need for this level of service. If you believe the service should have been fully covered as billed, or if you did not know and could not reasonably have been expected to know that we would not pay for this level of service, or if you notified the patient in writing in advance that we would not pay for this level of service and he/she agreed in writing to pay, ask us to review your claim within 120 days of the date of this notice. If you do not request an appeal, we will, upon application from the patient, reimburse him/her for the amount you have collected from him/her in excess of any deductible and coinsurance amounts. We will recover the reimbursement from you as an overpayment. | CO, PI or PR | 3 |
| M36 | This is the 11th rental month. We cannot pay for this until you indicate that the patient has been given the option of changing the rental to a purchase. | CO, PI or PR | 3 |
| M94 | Information supplied does not support a break in therapy. A new capped rental period will not begin. | CO, PI or PR | 3 |
| N10 | Adjustment based on the findings of a review organization/professional consult/manual adjudication/medical advisor/dental advisor/peer review. | CO, PI or PR | 3 |
| N130 | Consult plan benefit documents/guidelines for information about restrictions for this service. | CO, PI or PR | 3 |
| N171 | Payment for repair or replacement is not covered or has exceeded the purchase price. | CO, PI or PR | 3 |
| N223 | Missing documentation of benefit to the patient during initial treatment period. | CO, PI or PR | 3 |
| N370 | Billing exceeds the rental months covered/approved by the payer. | CO, PI or PR | 3 |
| N372 | Only reasonable and necessary maintenance/service charges are covered. | CO, PI or PR | 3 |
| N518 | No separate payment for accessories when furnished for use with oxygen equipment. | CO, PI or PR | 3 |
| N795 | Item must be resubmitted as a purchase. | CO, PI or PR | 3 |
| N812 | The start service date through and end service date cannot span greater than 18 months. | CO, PI or PR | 3 |
Frequently asked questions — CARC 108
What does CARC 108 mean?
CARC 108 is an X12 Claim Adjustment Reason Code. The official definition is: "Rent/purchase guidelines were not met." In plain English, the payer is telling you cARC 108 denies DMEPOS claims where the rent-vs-purchase guidelines weren't followed — a rental billed past the cap-rental period, or a purchase billed when the item should have been capped-rental.
How do I resolve a CARC 108 (CO-108) denial?
Start with the most common root cause: Capped-rental rules (CMS) not followed for DMEPOS. First step: Correct the modifier sequence and resubmit. See the full remediation and appeal checklist on this page before filing a formal appeal.
Is CARC 108 patient responsibility?
No — CARC 108 is typically carried under CO (Contractual Obligation) or OA (Other Adjustment), which means it is the provider's responsibility, not the patient's. Do not bill the patient unless the 835 CAS group code is PR.
What does CARC 108 look like on an EOB or 835 remittance?
On the 835 ERA, CARC 108 appears in Loop 2110 CAS segment as "CAS*CO*108*{amount}". On a paper EOB the same code prints in the Adjustment/Denial Reason column with the X12 description: "Rent/purchase guidelines were not met." — usually paired with one or more RARC remark codes in the same remittance line for additional context.
Can CARC 108 be appealed successfully?
Yes — when the root cause does not apply to the specific claim. Overturn rates are strongest when the appeal cites the X12 definition, the payer's own published policy, and documentation that rebuts the payer's rationale. The sample appeal language block above is a starting point; always adapt it to the payer's reconsideration form.
Disclaimer
This page is operational reference for medical-billing professionals. It is not legal, clinical, or contractual advice. X12 code descriptors are maintained by the X12 External Code Lists; always verify against the current X12 release and the payer's own published policy before submitting or appealing a claim.