Denial codes such as CO-97 affect roughly 20% of all medical claims, leading to delayed payments and higher administrative expenses for healthcare providers. This refusal often means that the billed service is not covered by the payer or is bundled with another service, resulting in confusion and revenue loss. Understanding the CO-97 denial code is critical for medical billers and coders to decrease claim rejections and increase reimbursements.
According to research, claim rejections cost the healthcare sector more than $262 billion annually, with non-covered treatments being one of the leading causes of denial. The CO-97 denial code is often confused with response code MA18, which implies problems with service coverage. By learning and rectifying these errors, billers can recover payments that might otherwise be lost and improve cash flow.
Addressing CO-97 rejections efficiently can cut rework by up to 30%, saving both time and costs. While it takes concentrated effort, addressing these denials increases compliance and promotes improved revenue cycle management.
This article outlines why CO-97 rejections occur and provides effective solutions to address them.
CO-97 Denial Code: What It Means and Why It Happens
The CO-97 denial code is one of the most common reasons for claim denials owing to non-covered services. It typically means that the service billed is not reimbursable under the payer’s coverage policy. The causes for this rejection are discussed below, as well as how to properly resolve it.
Definition of CO-97 Denial Code
CO-97 stands for: “The benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated.” Medicare and commercial insurers frequently use this code to refuse reimbursement for treatments that are considered comprehensive or not individually reimbursable.
It is often caused when:
- The operation is coupled with another, it is invoiced individually.
- The payer determines if a service is medically unnecessary.
- The operation is not covered under the patient’s current insurance coverage.
Common CO 97 Denial Reason
There are several reasons why this rejection appears on the Explanation of Benefits (EOBs), including:
- Unbundling CPT codes that are part of a primary procedure.
- Attempting to charge for excluded or restricted services.
- Inadequate modifications are needed (e.g., modifier 59).
Denial Code CO 97 with MA18
When combined with MA18, the rejection becomes more explicit. MA18 means: “The claim or service is not covered under the current benefit plan.” This happens when:
- A service is not included in the patient’s covered benefit package.
- The payer has made a non-medically necessary conclusion.
- Coverage has expired, or the patient’s plan has been discontinued.
How to Fix the CO 97 Denial
To handle the CO-97 denial code, take the following actions:
- Examine NCCI modifications to determine whether the operation should be paid separately.
- Use proper modifiers, such as 59, 25, or X-modifiers, only where warranted by documentation.
- Check the payer’s coverage policy to see if the service is chargeable under the patient’s plan.
- Submit an appeal with medical records when necessary to substantiate separate reimbursement.
- Educate employees to prevent frequent billing mistakes that result in this denial.
CO 97 and Non-Covered Services in Medical Billing
This section discusses the concept of non-covered services, their significance in medical billing, and tactics for avoiding associated denials.
What “Non-Covered” Really Means
A non-covered service is a treatment or product for which the payer refuses to reimburse. These are generally procedures that are not covered by the patient’s coverage plan or that are deemed unnecessary based on the diagnosis presented. When CO 97 is used in this situation, it often indicates that the invoiced service is packaged with another and is not eligible for independent reimbursement.
Here are some common examples:
- Routine lab tests are invoiced separately at preventive visits.
- Post-operative care during the global term is invoiced separately from the international cost.
- Duplicate services that were already paid for in a related operation.
How to Prevent Non-Covered Services Denial
To avoid CO-97 rejections for non-covered treatments, clear billing methods and thorough pre-service inspections are required.
1. Verify coverage in advance: Before providing care, verify service eligibility using real-time eligibility tools or payer portals.
2. Understand the Bundling Rules: Understand which treatments are always considered part of another, particularly under Medicare’s National Correct Coding Initiative (NCCI) changes.
3: Use the appropriate modifiers: When unbundling is warranted and documented, use the appropriate modifiers.
4. Document Medical Necessity: Provide a clear, succinct, and ICD-compliant explanation for services billed individually.
5. Educate Staff: Ensure programmers and front-desk workers are aware of common CO 97 rejections and how to prevent them.
Conclusion
The CO-97 rejection code is a common billing issue that arises when services are packaged or excluded from coverage. It indicates that the payer considers the billable service to be part of another treatment and is therefore not eligible for separate payment. To manage this efficiently, billing experts must evaluate coverage standards, accurately apply modifiers, and prove medical necessity as needed. Verifying coverage before treatment and educating personnel on common billing problems may help avoid recurring errors. Addressing these rejections promptly helps to stabilize revenue flow and increase overall claim acceptance rates.
FAQs
What does the CO-97 denial code mean in medical billing?
CO-97 indicates the billed service is included in another service’s payment or is not covered by the plan.
How is CO-97 different from the denial code MA18?
CO-97 relates to bundling or exclusion, while MA18 confirms the service isn’t part of the patient’s benefit plan.
How can I prevent CO-97 denials?
Verify coverage in advance, apply correct modifiers, and ensure medical necessity is documented.
What are the common reasons for receiving a CO-97 denial?
Frequent causes include unbundled procedures, excluded services, or missing required modifiers.
Can a CO-97 denial be appealed?
Yes, with proper documentation and proof of medical necessity, an appeal can be submitted for reconsideration.
