Denial code · CARC 198
CARC 198 (CO-198): authorization exceeded on behavioral-health claims
What CO-198 means when units, days or sessions run past the approval, how it shows up in residential, IOP, PHP, ABA and TMS billing, and how to tell a billing fix from a continued-stay appeal.
By the ClaimParrot editorial team · Who we are · Reviewed · 5 min read · 6 cited sources
Quick answer
CARC 198 means the service had an approval, but the claim goes past it: more units, days or sessions than approved, or dates outside the approved window. In behavioral health it usually means residential or inpatient days after the last covered day, ABA hours over the weekly approval, or IOP and PHP days beyond the span. Reconcile the approval before deciding to rebill or appeal.
| Item | Detail |
|---|---|
| Code | CARC 198 · Active on the X12 list; checked October 14, 2026 |
| Plain meaning | An approval existed, but the claim goes past it: more units, days or sessions than approved, or dates outside the approved window. |
| Group codes seen | CO (contractual obligation), PR (patient responsibility) |
| Common remark codes | N54, N362, N640, N188, N758 |
| Where it shows up in BH | Residential mental health, Inpatient psychiatry, Partial hospitalization (PHP), ABA therapy, TMS |
| Usual next step | Reconcile the approval; rebill if an extension exists, appeal the cut if not |
| Related codes | CARC 197, CARC 151, CARC 119, CARC 50 |
What does CARC 198 mean?
CARC 198 says approval or notice existed but the billed service went beyond it. The payer is not questioning the first approved days; it is refusing the excess. The question is whether an extension was granted and missed, the claim was billed wrong, or the plan declined to extend.
What do CO-198 and PR-198 mean for who pays?
Expect CO-198: the provider is responsible for staying inside the approval or getting it extended, so the excess is a write-off unless the extension is found or the denial is overturned. A PR-198 is unusual and should be checked against the plan terms before anyone bills the patient.
| Group + reason | What it signals | Who usually carries the balance |
|---|---|---|
| CO-198 | Units, days or dates exceed what the approval covers | Provider; the excess is not billable to the patient |
| PR-198 | Plan assigns the excess to the member | Patient, only if the plan terms support it |
Which remark codes come with CARC 198?
These remark codes show which limit the claim crossed. Read them before deciding whether this is a billing fix or a continued-stay dispute.
| Remark code | What it adds | What to check |
|---|---|---|
| N54 | Details on the claim do not match what was pre-certified or authorized. | Every field on the approval versus the claim |
| N362 | The days or units billed are more than the payer accepts as a maximum. | Units per day or per span on the approval |
| N640 | The number or frequency billed goes past what was approved or allowed for the period. | The approved frequency for the period, such as hours per week |
| N188 | The level of care that was approved does not match the procedure or revenue code billed. | Whether the approved level of care matches the code billed, such as PHP billed on an IOP approval |
| N758 | The payment was adjusted to match the prior-authorization decision. | Partial approvals: what the plan actually granted |
Where does CARC 198 show up in behavioral health?
Behavioral-health 198 denials follow concurrent review. The approval covered a block of days, hours or sessions, the next review cut or never extended it, and care continued. Billing a different level of care than the approval names also produces 198, often with N188.
| Care setting | Typical trigger | Check first |
|---|---|---|
| Residential mental health | Days after the last covered day while an extension was pending | Review dates, extension requests and the plan's responses |
| Inpatient psychiatry | Length of stay past the approved days | Last covered day and any expedited appeal |
| Partial hospitalization (PHP) | PHP billed on an IOP-level approval after a step-down | Level of care and dates on each approval |
| ABA therapy | Weekly hours above the approved units | Units per code per week versus scheduled hours |
| TMS | Sessions beyond the approved course | Session count and any extension request |
Corrected claim, reconsideration or appeal: which fits CARC 198?
Reconcile first. If the plan granted an extension that the claim did not reference, send a corrected claim or reconsideration with it. If the plan cut or refused to extend the approval, the dispute is a continued-stay or concurrent-review appeal about medical necessity, and the clock started with that decision.
- 01Lay out each approval: codes, units, level of care and dates. Compare it line by line with the claim.
- 02Missed extension or billing error: correct the units, dates or code and resubmit, attaching the extension.
- 03Refused extension: appeal the concurrent-review decision with records for the denied days (continued-stay guide).
What evidence resolves a CARC 198?
The packet has two halves. The administrative half proves what was approved and when extensions were requested. The clinical half, needed only when the plan refused to extend, shows why the patient still met criteria on the denied days, using the same criteria the reviewer applied.
- Every approval and extension letter, with dates and units
- Concurrent-review submissions and call records
- A day-by-day reconciliation of approved and billed units
- Clinical notes and assessments for the days over the approval
- Discharge-planning notes showing barriers to stepping down
How do Medicare, Medicaid and commercial plans differ on CARC 198?
Concurrent-review rules differ by program. Under ERISA, cutting short an approved course of treatment is itself an adverse decision that must come with enough notice to appeal before care stops. Medicare and Medicaid set their own recertification and service-limit rules for behavioral-health levels of care.
| Program | What differs |
|---|---|
| Medicare (Original) | PHP needs physician recertification at least every 30 days; IOP needs a physician determination at least every other month. |
| Medicaid | States set service limits. Ohio Medicaid allows 30 consecutive days of peer support before approval is required to continue. |
| Commercial and ERISA plans | Ending or reducing an approved course early is an adverse benefit decision; a request to extend urgent care must be decided quickly. |
CO-198 on residential days 22 to 28
A fictional residential mental-health program had approval for 21 days. The concurrent review on day 20 ended without a decision, the team kept the patient, and days 22 to 28 came back CO-198 with N54.
The reconciliation showed the extension request was submitted on time but never answered. The team appealed with the submission confirmation, the day-20 clinical update and the safety-plan notes, and asked the plan to treat its missing decision as a reason to cover the gap.
Names, dates, payers and amounts are invented for illustration.
What a ClaimParrot packet does here
- When CARC 198 needs an appeal rather than a corrected claim, an appeal packet answers the payer's stated reason.
- A person checks every packet: $29, or $99 for level of care, and the first is free (pricing).
- No remittances, records or PHI are sent: just the reason and a de-identified summary (Trust & security).
Every draft is reviewed and approved by your team. ClaimParrot does not make medical-necessity determinations or give legal advice.
Frequently asked questions
Is a CO-198 a medical-necessity denial?
Not on its face. It says the approval was exceeded. It becomes a medical-necessity dispute when the plan refused to extend; then appeal that decision with clinical records, as you would a CARC 50.
Can we split the over-limit days onto a new claim to get them paid?
No. Splitting does not create approval and can look like an attempt to bypass edits. Get the extension or appeal the refusal, then bill the days the plan covers.
What if the plan never answered our extension request?
Document the request and the silence. Plans covered by CMS-0057-F must decide standard requests within 7 days and urgent ones within 72 hours; a missed clock is a point to raise in the appeal.
Does N188 with CARC 198 mean the wrong code was billed?
Often. N188 flags a mismatch between the level of care on the approval and the code on the claim. If the patient stepped down and the claim kept the higher-level code, correct it; if the higher level was right, request the matching approval.
Primary sources and references
- Claim Adjustment Reason Codes (CARC) code list · X12 · checked
- Remittance Advice Remark Codes (RARC) code list · X12 · checked
- 29 CFR 2560.503-1: ERISA claims procedure · eCFR · checked
- CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F) fact sheet · CMS · checked
- MLN1986542, Medicare & Mental Health Coverage (March 2026) · CMS Medicare Learning Network · checked
- Ohio Medicaid Behavioral Health Provider Requirements and Reimbursement Manual, v1.28.1 (March 2026) · Ohio Department of Medicaid · checked
General information, not legal or medical advice. Payer rules change; confirm deadlines and requirements in the notice and the plan documents. Read our editorial policy.
Decode the next line on the remittance.
Type a group and reason code such as CO-197 or PR-96, or a remark code such as N386. The lookup runs in your browser and needs no patient details.