Claim adjustment reason code · X12
CARC 97: included in another service.
CARC 97 says this service is already paid for inside another service the payer processed. Before you appeal, check whether the two codes really belong together, and whether a modifier is supported by your documentation.
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What X12 says CARC 97 means
The benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated.
CARC 97 · Start 01/01/1995, last modified 07/01/2017.
X12 usage note: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.
Why payers bundle
For Medicare, CMS runs the National Correct Coding Initiative. Its policy manual says NCCI procedure-to-procedure edits define when two codes may not be reported together "except under special circumstances", and that where an edit allows a modifier, both codes can be paid when the two procedures are done at different patient encounters or different anatomic sites. Other payers run similar edits. A CARC 97 on the second code is often one of these edits firing.
When a modifier is legitimate
CMS is direct that modifiers 59, XE, XP, XS and XU "shall NOT be used to bypass an NCCI PTP edit unless the proper criteria for use of the modifier are met" and that the medical record must support them. If the services truly were separate, see modifier 59. If an evaluation and management visit was separately identifiable on the same day as a minor procedure, see modifier 25. If neither applies, the payment was probably correct.
What to check
- Find the other service on the claim that the payer says includes this one. The remark code often points to it.
- Compare dates, sites, sessions and rendering providers on both lines.
- Read the documentation as the payer's reviewer would. Does it show a separate session, site or practitioner?
- If you add a modifier, submit a corrected claim or reopening as the payer directs. For Medicare, appeals have a 120-day clock; see CARC 50 for the calculator.
- Do not bill the patient for a CO bundled line unless the payer or contract says you may.
Worked example (hypothetical)
A visit includes two procedures on the same date. The payer pays code A and denies code B with CO-97. Both were done in the same session on the same site, so there is no separate-site or separate-encounter story, and adding 59 would be improper. The write-off stands. In another case code B was done on a different finger in the same session; the chart documents it, and a corrected claim with the right modifier may be supportable.
Sources
- X12: Claim Adjustment Reason Codes — code text, start and last-modified dates (list dated 10/30/2026, retrieved 2026-11-01)
- CMS: Medicare NCCI Policy Manual, Chapter 1 (rev. 1/1/2026) — PTP edits and modifiers 25, 59, XE, XP, XS, XU (retrieved 2026-11-01)
- CMS: Medicare NCCI Policy Manual page — manual index, page modified 01/06/2026
Every code description and rule above was retrieved from these pages on November 1, 2026. Payers revise code lists, contracts and policies, so confirm anything that affects a claim or a deadline with the payer.
Frequently asked questions
Does CARC 97 mean the service is not covered?
No. It means the benefit is included in the payment for another service already adjudicated. The service may be covered but not paid separately.
Can I add modifier 59 to get paid?
Only if the record supports a distinct session, site, encounter or practitioner and no more specific modifier fits. CMS says not to use 59 or the X modifiers just to bypass an edit.
Can I bill the patient after a CARC 97?
Usually not when the group code is CO. Check the group code and your payer contract first.
Not legal, billing or medical advice
This page explains published code lists and rules and runs a lookup in your browser. It cannot see your claim, your contract or any payer's policy. Confirm with the payer or your Medicare Administrative Contractor before you resubmit, appeal or bill a patient.