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CARC 24 · CO-24

CARC 24 Denial: Charges are covered under a capitation agreement/managed care plan — How to Fix and Appeal

Reviewed by QuickIntell RCM Editorial Team · Last reviewed

Updated

TL;DR

CARC 24 (X12 Charges are covered under a capitation agreement/managed care plan). CARC 24 means the payer considers the service to be included in a capitation payment (a fixed per-member-per-month payment to a provider group or IPA), so no fee-for-service payment will be issued for this claim.

Official X12 description

“Charges are covered under a capitation agreement/managed care plan.”

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 24 actually means

CARC 24 means the payer considers the service to be included in a capitation payment (a fixed per-member-per-month payment to a provider group or IPA), so no fee-for-service payment will be issued for this claim. It can also appear when a patient is assigned to a capitated medical group and the claim was routed outside that group. The action is usually to redirect the claim to the capitated group or to accept the write-off if capitation is the correct contracted arrangement.

Common root causes

  • Provider is part of a capitated IPA/medical group and the service is covered under that cap.
  • Patient is assigned to a delegated capitated group and the claim was sent to the health plan instead.
  • Capitation encounter billing was correctly submitted and the zero-pay is expected (encounter data, not a payment).

Prevention checklist

  • Verify the patient's assigned medical group or IPA at eligibility — do not assume health-plan billing applies.
  • Distinguish encounter claims (capitated) from fee-for-service claims in your PM system with separate billing policies.
  • Map capitated contracts to the correct adjustment codes so CARC 24 posts as a contractual write-off, not a denial in your reporting.

Appeal strategy — step by step

Most CARC 24 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.

  1. 1If the patient is not in your capitated group and was incorrectly assigned, work with the health plan's provider relations to correct the assignment, then rebill.
  2. 2If your contract genuinely capitates this service, the CARC 24 is a proper contractual adjustment and is not appealable.
Sample appeal-letter language for CARC 24
[Provider letterhead] Re: Appeal of CARC 24 — Claim #{claim_number} Member: {member_name} · Member ID: {member_id} Date(s) of Service: {dos} On {remittance_date} this claim was adjusted with CARC 24: "Charges are covered under a capitation agreement/managed care plan." We respectfully request reconsideration. The X12 External Code List definition of CARC 24 does not apply to this claim for the following reasons: 1. [Cite the clinical / coding / policy fact that rebuts the adjustment] 2. [Cite the supporting documentation attached — op note, EOB, LCD/NCD citation, NCCI edit indicator, modifier rationale] 3. [Cite the payer's own policy where applicable] Attached: {list supporting documents} Please process payment under the member's benefits. If additional information is required, contact the billing office at {provider_phone} or {provider_email}. Sincerely, {billing_manager_name}, {credentials}

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 24 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 24?

Search demand rank
#21

Out of 306 seeded CARCs, ranked by combined US monthly search volume for "CARC 24", "CO-24 denial", and "denial code 24".

Platform frequency
Pending ETL

Platform frequency ranks publish once the anonymized denial-rate pipeline reaches the publication threshold (strategy §12 Phase 2).

How QuickRCM prevents CARC 24

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.
See QuickRCM →Book a demo

Frequently asked questions — CARC 24

What does CARC 24 mean?

CARC 24 is an X12 Claim Adjustment Reason Code. The official definition is: "Charges are covered under a capitation agreement/managed care plan." In plain English, the payer is telling you cARC 24 means the payer considers the service to be included in a capitation payment (a fixed per-member-per-month payment to a provider group or IPA), so no fee-for-service payment will be issued for this claim. It can also appear when a patient is assigned to a capitated medical group and the claim was routed outside that group. The action is usually to redirect the claim to the capitated group or to accept the write-off if capitation is the correct contracted arrangement.

How do I resolve a CARC 24 (CO-24) denial?

Start with the most common root cause: Provider is part of a capitated IPA/medical group and the service is covered under that cap. First step: If the patient is not in your capitated group and was incorrectly assigned, work with the health plan's provider relations to correct the assignment, then rebill. See the full remediation and appeal checklist on this page before filing a formal appeal.

Is CARC 24 patient responsibility?

No — CARC 24 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 24 look like on an EOB or 835 remittance?

On the 835 ERA, CARC 24 appears in Loop 2110 CAS segment as "CAS*CO*24*{amount}". On a paper EOB the same code prints in the Adjustment/Denial Reason column with the X12 description: "Charges are covered under a capitation agreement/managed care plan." — usually paired with one or more RARC remark codes in the same remittance line for additional context.

Can CARC 24 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.