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CARC 294 · CO-294

CARC 294 Denial: Payment made to attorney — How to Fix and Appeal

Reviewed by QuickIntell RCM Editorial Team · Last reviewed

Updated

TL;DR

CARC 294 (X12 Payment made to attorney). CARC 294 reports payment issued to the patient's attorney (typically in P&C, workers' comp, or liability-settlement contexts).

Official X12 description

“Payment made to attorney.”

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 294 actually means

CARC 294 reports payment issued to the patient's attorney (typically in P&C, workers' comp, or liability-settlement contexts). Informational.

Common root causes

  • Payment routed to attorney of record per jurisdiction.

Prevention checklist

  • Attorney-of-record capture for liability/P&C claims.

Appeal strategy — step by step

Most CARC 294 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. 1Coordinate with attorney per jurisdictional rules.
Sample appeal-letter language for CARC 294
[Provider letterhead] Re: Appeal of CARC 294 — Claim #{claim_number} Member: {member_name} · Member ID: {member_id} Date(s) of Service: {dos} On {remittance_date} this claim was adjusted with CARC 294: "Payment made to attorney." We respectfully request reconsideration. The X12 External Code List definition of CARC 294 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 294 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 294?

Search demand rank
#254

Out of 306 seeded CARCs, ranked by combined US monthly search volume for "CARC 294", "CO-294 denial", and "denial code 294".

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 294

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 294

What does CARC 294 mean?

CARC 294 is an X12 Claim Adjustment Reason Code. The official definition is: "Payment made to attorney." In plain English, the payer is telling you cARC 294 reports payment issued to the patient's attorney (typically in P&C, workers' comp, or liability-settlement contexts). Informational.

How do I resolve a CARC 294 (CO-294) denial?

Start with the most common root cause: Payment routed to attorney of record per jurisdiction. First step: Coordinate with attorney per jurisdictional rules. See the full remediation and appeal checklist on this page before filing a formal appeal.

Is CARC 294 patient responsibility?

No — CARC 294 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 294 look like on an EOB or 835 remittance?

On the 835 ERA, CARC 294 appears in Loop 2110 CAS segment as "CAS*CO*294*{amount}". On a paper EOB the same code prints in the Adjustment/Denial Reason column with the X12 description: "Payment made to attorney." — usually paired with one or more RARC remark codes in the same remittance line for additional context.

Can CARC 294 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.