CARC 264 Active

CO-264: Pharmaceutical Postage Cost Adjustment

TL;DR

Postage cost is a contractual write-off. Check your contract and either appeal if covered or accept the adjustment.

Action

Verify & Resubmit

Who Pays

Provider

Appeal

Yes

Patient Impact

None

Disclaimer

This content is for informational purposes only and does not constitute professional billing advice. Always verify information against your payer contracts and current coding guidelines. Consult a certified billing specialist for specific claim issues.

What Does CO-264 Mean?

CO-264 designates the pharmaceutical postage cost as a contractual write-off. The payer's contract either excludes postage as a separately billable item or limits reimbursement to a specific rate. The provider absorbs the difference and cannot bill the patient for the adjusted postage amount.

CARC 264 signals that the payer has adjusted the postage cost portion of a pharmaceutical claim. This code is exclusively for pharmaceutical billing and covers the postal charges incurred when mailing medications to patients — typically through USPS or similar postal services. It is distinct from delivery (CARC 262), shipping via carrier (CARC 263), and administrative handling (CARC 265).

Pharmacies that mail prescriptions to patients, particularly mail-order pharmacies and specialty pharmacies serving patients in remote areas, are the primary recipients of this adjustment. The payer may deny postage charges entirely if the contract bundles all fulfillment costs into the drug reimbursement, or may allow postage up to a capped amount. In some cases, the denial occurs simply because the postage charge was not properly coded or documented on the claim.

Most CARC 264 adjustments appear with Group Code CO, making the postage cost a contractual write-off that the provider must absorb. The patient cannot be billed for this adjustment. Before accepting it, check whether your contract includes postage as a separately reimbursable line item and whether the correct billing codes were used. If postage is contractually covered and the payer denied it in error, request reprocessing.

Common Causes

Cause	Frequency
Postage charges not a covered benefit The patient's plan does not reimburse postage costs for pharmaceutical mailings, so the payer adjusts the amount to zero	Most Common
Billing errors in postage charges Incorrect billing codes, wrong postage amounts, or quantity discrepancies on the claim	Common
Missing documentation for postage costs Insufficient supporting evidence such as postage receipts, mailing records, or prescription shipping logs	Common
Postage cost exceeds plan limits The billed postage amount exceeds the payer's maximum allowable charge for pharmaceutical mailing	Occasional
Medication not on formulary The pharmaceutical being mailed is not covered by the plan, so all associated costs including postage are denied	Occasional

How to Resolve

Confirm postage cost coverage under your payer contract, verify billing accuracy, and resubmit with documentation or accept the contractual write-off.

Verify contract terms on postage Review whether your payer contract includes pharmaceutical postage as a reimbursable charge. If not, the adjustment is valid.
Correct any billing errors If postage was coded incorrectly, fix the codes and resubmit. Ensure postage is billed separately from drug costs.
Post the write-off or request reprocessing Accept the contractual adjustment if postage is not covered. If it is covered and was denied in error, request reprocessing with supporting documentation.

How to Prevent CO-264

Maintain a payer-by-payer reference of which contracts include postage reimbursement
Verify postage coverage before billing it as a separate line item
Keep detailed postage records including receipts and mailing logs for all pharmaceutical shipments
Audit pharmaceutical postage billing periodically to catch errors

General Prevention

Verify that pharmaceutical postage costs are a covered benefit under each payer contract before billing
Maintain detailed postage documentation including receipts, mailing logs, and tracking information
Ensure postage charges are properly separated from drug costs and use correct billing codes
Conduct regular audits of pharmaceutical postage billing for accuracy
Train staff on payer-specific requirements for postage cost reimbursement

Also Filed As

The same CARC 264 may appear with different Group Codes:

OA-264

Related Denial Codes

CO-24 — Charges Covered Under Capitation or Managed Care CO-44 — Prompt-Pay Discount CO-45 — Charge Exceeds Fee Schedule / Maximum Allowable CO-59 — Multiple / Concurrent Procedure Payment Reduction CO-66 — Blood Deductible

Sources

https://www.mdclarity.com/denial-code/264
https://x12.org/codes/claim-adjustment-reason-codes
Codes maintained by X12. Visit x12.org for official definitions.