235Denial Code (CARC)Active
PR 235 Denial Code - Sales Tax Adjustment Tips
Code 235 indicates that the adjustment on the claim is due to sales tax being applied to the service or item. This means the payer has subtracted the sales tax amount from the payment to the provider.
Who Pays: Group Code Liability
Sales tax adjustments under code 235 typically fall under the group code PR, making the sales tax amount billable to the patient. However, confirm with the payer as some may handle it differently.
Why Claims Get Code 235
- The service or item provided is subject to sales tax in the jurisdiction.
- The provider's billing system did not account for applicable sales tax.
- The payer's processing system automatically applies sales tax to certain services.
- A misunderstanding of tax-exempt status for certain medical items or services.
- Provider failed to include sales tax in the original claim submission.
How to Fix & Resubmit
- Verify with the payer whether the sales tax was correctly applied to the service or item.
- Check your billing system to ensure sales tax rules for the jurisdiction are correctly set up.
- If the sales tax should not have been applied, contact the payer to dispute the adjustment.
- If applicable, bill the patient for the sales tax amount as indicated by the group code PR.
- Resubmit the claim with corrections if necessary, based on payer guidance.
Corrected Claim or Appeal?
For code 235, submit a corrected claim if your billing system failed to include sales tax initially. If the sales tax was incorrectly applied, a formal appeal may be necessary.
Preventing Future 235 Denials
- Ensure your billing system is configured to apply sales tax correctly based on local regulations.
- Train staff on identifying taxable services and items to avoid future errors.
- Regularly review payer policies on sales tax to ensure compliance.
- Implement a checklist for billing staff to verify sales tax applicability before claim submission.