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CARC 27 · CO-27

CARC 27 Denial: Expenses incurred after coverage terminated — How to Fix and Appeal

Reviewed by QuickIntell RCM Editorial Team · Last reviewed

Updated

TL;DR

CARC 27 (X12 Expenses incurred after coverage terminated). CARC 27 means the patient was not insured by this payer on the date of service.

Official X12 description

“Expenses incurred after coverage terminated.”

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 27 actually means

CARC 27 means the patient was not insured by this payer on the date of service. Either the policy had terminated, the patient had moved to a different plan, or the eligibility record the payer has does not reflect coverage on that date. Verify the patient's actual coverage for the DOS; if the patient had different coverage, rebill the correct payer. If the patient was genuinely uninsured on that date, the balance becomes self-pay.

Common root causes

  • Employer-sponsored coverage terminated at the end of the prior month due to job change, and the patient did not disclose the change at check-in.
  • Individual / marketplace policy cancelled for non-payment of premium.
  • Patient transitioned from active employee coverage to COBRA and the new COBRA election was not yet loaded in the payer's eligibility system.
  • Eligibility was checked but read incorrectly at registration.

Prevention checklist

  • Run real-time 270/271 eligibility at each visit, not just on the first encounter.
  • If the eligibility response shows 'pending termination' or 'coverage ending soon', flag the account and collect updated coverage at check-in.
  • For Medicare patients, check HETS at each visit — retroactive termination is uncommon but does occur.

Appeal strategy — step by step

Most CARC 27 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 had different active coverage on the DOS, rebill that payer; no appeal of CARC 27 is needed.
  2. 2If the patient had active coverage with this payer and the payer's eligibility file is wrong, appeal with a screenshot of the HETS or 271 response confirming coverage on the DOS, plus the payer's premium-paid confirmation if available.
  3. 3When COBRA is retroactively elected, the payer is obligated to process the claim once the COBRA record lands; wait for the eligibility update and rebill rather than appealing.
Sample appeal-letter language for CARC 27
[Provider letterhead] Re: Appeal of CARC 27 — Claim #{claim_number} Member: {member_name} · Member ID: {member_id} Date(s) of Service: {dos} On {remittance_date} this claim was adjusted with CARC 27: "Expenses incurred after coverage terminated." We respectfully request reconsideration. The X12 External Code List definition of CARC 27 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 27 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 27?

Search demand rank
#19

Out of 306 seeded CARCs, ranked by combined US monthly search volume for "CARC 27", "CO-27 denial", and "denial code 27".

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 27

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.
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Frequently asked questions — CARC 27

What does CARC 27 mean?

CARC 27 is an X12 Claim Adjustment Reason Code. The official definition is: "Expenses incurred after coverage terminated." In plain English, the payer is telling you cARC 27 means the patient was not insured by this payer on the date of service. Either the policy had terminated, the patient had moved to a different plan, or the eligibility record the payer has does not reflect coverage on that date. Verify the patient's actual coverage for the DOS; if the patient had different coverage, rebill the correct payer. If the patient was genuinely uninsured on that date, the balance becomes self-pay.

How do I resolve a CARC 27 (CO-27) denial?

Start with the most common root cause: Employer-sponsored coverage terminated at the end of the prior month due to job change, and the patient did not disclose the change at check-in. First step: If the patient had different active coverage on the DOS, rebill that payer; no appeal of CARC 27 is needed. See the full remediation and appeal checklist on this page before filing a formal appeal.

Is CARC 27 patient responsibility?

No — CARC 27 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 27 look like on an EOB or 835 remittance?

On the 835 ERA, CARC 27 appears in Loop 2110 CAS segment as "CAS*CO*27*{amount}". On a paper EOB the same code prints in the Adjustment/Denial Reason column with the X12 description: "Expenses incurred after coverage terminated." — usually paired with one or more RARC remark codes in the same remittance line for additional context.

Which RARC is paired with CARC 27?

CARC 27 is commonly observed with RARC MA27, N30. The RARC narrows the reason — for example, pointing at a missing modifier, an LCD citation, or a specific policy. Fix the underlying CARC first; the RARC usually clears with the corrected claim.

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.