CARC 76 Active

OA-76: Disproportionate Share Adjustment

TL;DR

The DSH adjustment balance is flagged for the secondary payer. Forward the claim with the primary ERA.

Action
Resubmit
Who Pays
Depends
Appeal
No
Patient Impact
Indirect
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 OA-76 Mean?

OA-76 appears in coordination of benefits scenarios where the primary payer's DSH adjustment is forwarded to a secondary payer. This is an informational adjustment — the secondary payer evaluates the balance under its own payment methodology.

CARC 76 appears on remittances for hospitals that qualify for Disproportionate Share Hospital payments under Medicare's Inpatient Prospective Payment System. The DSH add-on recognizes that hospitals treating a higher proportion of low-income and Medicaid-eligible patients incur greater uncompensated care costs and should receive additional reimbursement.

The DSH payment is calculated based on the hospital's disproportionate patient percentage (DPP), which combines two components: the Medicaid patient utilization rate (Medicaid days as a fraction of total days) and the SSI recipient ratio (Medicare patients receiving Supplemental Security Income as a fraction of total Medicare discharges). Hospitals must meet a minimum DPP threshold to qualify for DSH payments, and the add-on amount scales with the DPP.

CARC 76 on the ERA represents the contractual difference between billed charges and the DRG-plus-DSH payment. Like CARC 74 (IME) and CARC 75 (DGME), this is a standard Medicare payment component rather than a true denial. It is almost always paired with CO, making it a contractual write-off. If the DSH adjustment amount seems wrong, the issue typically traces to incorrect Medicaid utilization data, outdated SSI ratios, or a hospital that fell below the DPP eligibility threshold. Revenue cycle teams at DSH-eligible hospitals should reconcile CARC 76 alongside CARC 74 and 75 for comprehensive Medicare payment monitoring.

Common Causes

Cause Frequency
Coordination of benefits DSH adjustment In multi-payer situations, the primary payer's DSH adjustment is passed to the secondary payer under OA Most Common

How to Resolve

Validate the DSH eligibility status and adjustment calculation, then post the contractual write-off or submit corrected data to the MAC.

  1. Submit to the secondary payer File a secondary claim with the primary ERA showing the OA-76 adjustment and complete hospital documentation.
  2. Process the secondary ERA Review the secondary adjudication and post the payment or adjustment accordingly.
Do Not Appeal This Code

This adjustment is typically correct as processed. Review the specific circumstances before taking further action.

How to Prevent OA-76

General Prevention

Also Filed As

The same CARC 76 may appear with different Group Codes:

CO-76

Related Denial Codes

OA-13 — Date of Death Precedes Date of Service OA-19 — Workers' Compensation Claim OA-20 — Liability Carrier Responsible OA-21 — No-Fault Carrier Responsible OA-22 — Care Covered by Another Payer (COB)

Sources

  1. https://www.mdclarity.com/denial-code/76
  2. https://ambci.org/medical-billing-and-coding-certification-blog/guide-to-claim-adjustment-reason-codes-carcs
  3. https://www.sprypt.com/denial-codes/carc-and-rarc-codes
  4. Codes maintained by X12. Visit x12.org for official definitions.