Claim adjustment reason code
Denial code CO-253 meaning
CARC 253, usually seen as CO-253: A reduction in the federal payment, called sequestration.
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- Reason code
- CARC 253
- Short name
- Sequestration
- Plain meaning
- A reduction in the federal payment, called sequestration.
- Group codes
- CO-253: Contractual obligation. The provider absorbs the amount under its contract or the payer's rules. Do not bill the patient for it.
Plain-English summary written by Rivvi. X12 owns the CARC list and its exact wording, which is not reproduced here. Read it on the X12 CARC list (list dated November 1, 2025, checked October 23, 2026). This page does not decide how a claim is paid.
Common causes
- Medicare applies a 2 percent payment reduction required by federal law.
What to check before resubmitting
- Write it off. Do not bill the patient for it.
Related reason codes
Related pages
Questions
What does denial code CO-253 mean?
A reduction in the federal payment, called sequestration. This is Rivvi's plain-English summary of CARC 253. X12's exact wording is on x12.org.
How do I fix CO-253?
Write it off. Do not bill the patient for it.
Can I bill the patient for CO-253?
With group code CO, no. CO means the provider absorbs the amount under its contract or the payer's rules.
Which group codes come with CARC 253?
Most often CO (contractual obligation). The group code, not the reason code, says who owes the amount.
What is the difference between a CARC and a RARC?
A claim adjustment reason code (CARC) says why a claim line was paid differently than billed. A remittance advice remark code (RARC) adds detail, such as which field is missing.