CO 4 — Required Modifier Missing

Payers may reject your claim using code CO 4 when there’s a discrepancy between the procedure code
and the diagnosis code or if the necessary modifier is missing.

In other words, it means that the medical treatment or service you provided doesn’t align with the
medical condition or diagnosis for which you’re billing.

Further Actions

 Carefully examine the explanation of benefits to understand the reason behind the rejection.

 Collaborate with your coding team to thoroughly review codes submitted with the claim. Ensure
that the procedure and diagnosis codes, along with any necessary modifiers, are accurate and
align with the services provided.

 If the coding team confirms that the claim is correct, then reprocess the claim by contacting the
insurance company’s claims department.

 If the insurance representative refuses to reprocess the claim, you have the right to submit an
appeal with medical records explaining the medical necessity of the provided treatment or
service.

CO 11 — Error in Coding

Payers deny your claim with code CO 11 when the diagnosis code you submitted on the claim doesn’t
align with the procedure or service performed. This situation can arise for several reasons, such as:

 Making a typo in the diagnosis code.

 Using an incorrect diagnosis code.

 Submitting a diagnosis code that isn’t supported by the patient’s medical records.

 Billing a procedure or service that isn’t covered by the patient’s insurance plan for the submitted
diagnosis code.

Further Actions

 Stay current with the latest American Medical Association (AMA) guidelines and Local Coverage
Determinations (LCDs).

 Double-check all diagnosis codes for accuracy before submitting a claim.

 Craft a strong appeal letter that details the rationale for your claim, including the correct
diagnosis-procedure code linkage, and provide any supporting documentation to substantiate
your case.

CO 15 — Missing or Invalid Authorization Number

The insurance company will deny your claim with the code CO 15 if you enter the wrong authorization
number for a service or procedure.
You need prior approval from the health plan company to get coverage for certain services or treatments
to patients.

After approval, you need to enter the prior authorization number in block number 23 on the CMS-1500
form. Failure to do so will result in claim denials.

Further Actions

 Contact the billing department to check whether or not they submitted prior authorization
requests.

 Recheck block number 23 on the insurance form to identify errors.

 If pre-authorization details aren’t available, place the claim on hold and try to get retro
authorization.

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CO 16 — Lacks Information Needed for Adjudication

Health plan providers deny claims with missing information using the code CO 16. One of the top
reasons for such denials is missing or incorrect modifiers.

According to MDAudit’s Final Benchmark Report 2022, 34% of hospital claims were denied due to
missing or incorrect modifiers.

Some reasons for CO 16 denials include:

 Inpatient hospital claims: $690

 Outpatient claims: $900

 Professional claims: $170

Some reasons for CO 16 denials include:

 Demographic and technical errors

 Incorrect modifier

 Missing social security number

 Invalid Clinical Laboratory Improvement Amendments (CLIA) number

Further Actions

 Pay attention to accompanying remark codes and make changes accordingly.

 Recheck clinical notes to find missing information.

 Contact a clearinghouse to scrub claims before submitting them to payers.

CO 18 — Duplicate Claim
Insurance companies use the code CO 18 in conjunction with RARC N522 to deny duplicate claims. They
mark claims as duplicates if you:

 Submit the same claim for a service or treatment twice.

 Resubmit the claim without indicating that it’s corrected.

 Provide the same service multiple times on the same day without a modifier.

When you send a claim to both primary and secondary payers, there’s a risk of denial if your primary
insurer has already submitted it to the secondary payer.

You should check the electronic remittance advice to know whether or not the primary insurance
provider crossed the claim over to the secondary one. If they did, you don’t need to resubmit the claim.

Further Actions

If you received the CO 18 denial, you should:

 Contact the insurance provider to uncover duplication reasons.

 Verify the claim processing status.

 Request the health plan company to reprocess the claim if you’re certain you submitted the
claim only once.

 File an appeal if the health plan provider doesn’t provide a reasonable cause for the denial.

CO 22 — Coordination of Benefits

When dealing with patients who have multiple payers, it’s crucial to establish primary, secondary and
tertiary insurance providers through coordination of benefits rules.

If you bill tertiary insurance companies for procedures covered by secondary providers, they’ll deny your
claim with code CO 22.

You should always submit the claim to the primary health plan provider first. Then you can send the bill
for the remaining balance to secondary or tertiary providers.

CO 22 denials can occur due to failure to update patients’ insurance details and incorrect coordination of
benefits information.

Further Actions

 Perform insurance eligibility checks to identify primary insurance providers.

 Update clients’ coordination of benefits data.

 Know where to file the claim — Medicare, an employer-sponsored group insurance plan, private
insurer or Medicare Advantage Plan.

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CO 27 — Expenses Incurred After the Patient’s Insurance Expired

If you provide services to patients past their insurance expiration date, health plan providers will reject
your claims with code CO 27.

It’s challenging to fight these denials. You should perform insurance eligibility verification checks before
appointments to avoid such rejections. Prevention is better than cure!

Further Actions

 Contact the claims department to confirm the insurance policy’s effective and termination dates.

 Reach out to patients to check if they have any secondary insurers.

 Send the claim back for reprocessing if the policy is still active because even insurance providers
can make mistakes.

 After conducting insurance verification, if you find out that patients don’t have any active
insurance, you’ll need to bill them directly.

CO 29 — Limit for Filing Expired

Each insurance carrier has its claim submission time frame. And if you send them claims after submission
deadlines, they’ll reject them using the denial code CO 29.

Further Actions

 Check the date you submitted the initial claim to the health plan provider.

 Calculate whether or not you submitted the claim before the filing deadline. You can use the
following formula to calculate the same.

o Time taken to submit original claim = Date insurance received the initial claim – date
service provided to the patient

 If you have proof of timely filing, file for an appeal.

CO 45 — Charges Exceed Fee Schedule

Insurance companies deny your claim with code CO 45 when charges for the medical services you
provided exceed the fee schedule maximum allowable or contracted amount that the insurance
company has agreed to pay you.

Further Actions

 Review the bill and verify that the charges align with the agreed-upon rates in your contract with
the insurance company.

 Confirm that the fee schedule in question is accurate and up-to-date.

 If the charges do indeed exceed the fee schedule and the patient is responsible for the
difference, work with the patient to arrange a reasonable payment plan.

CO 97 — Service Already Adjudicated

Health plan providers deny claims using CO 97 when you file multiple claims for bundled services —
procedures performed in a single care episode.

Evaluation and management (E&M) services billed within the global period fall under this category as
insurance companies don’t reimburse you for each performed service; they pay an overall amount for
performed procedures.

Some common examples of bundled services that aren’t payable separately include:

 Collecting blood samples during patient encounters.

 Transferring specimens from the lab to the doctor’s office.

 Using extended codes even though your practice runs 24 hours daily.

Further Actions

 Check whether the procedure code falls under the inclusive, exclusive or bundled category.

 Once you determine the type of procedure code, contact the coding department and ask them if
they can use a modifier and resubmit the claim.

 Call the claims department and ask them about the procedure for filing an appeal.

CO 167 — Diagnoses Not Covered

Payers don’t cover every procedure. They use the denial code CO 167 to reject claims that don’t fall
within their coverage area.

Further Actions

 Review diagnosis codes (ICD-11) to identify errors.

 Contact the insurance provider to determine which diagnoses aren’t covered.

 After revisions, resubmit the claim as a corrected claim.

Go through the claim denial codes list to learn more about denial codes.

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How To Avoid Denials

Denials can damage the financial health of your practice or company. Now that you know the common
reasons and denial codes, you can predict and prevent denials.
We’ve highlighted some things you can follow to avoid denials.

Leverage Technology

Following manual processes can invite errors. And there’s no room for mistakes when it comes to
submitting claims. One typo and there goes your claim into the denial bin.

You should invest in medical billing solutions, medical practice management software, medical claims
processing platforms and electronic health records to submit clean claims. They help you store and
update patients’ insurance details whenever required.

Clearinghouse integration assists you in scrubbing claims for coding and formatting discrepancies before
sending them to payers.

Use these products as shields and bid farewell to denials!

Educate Your Staff

Employees unaware of the latest claim submission guidelines are likely to process claims incorrectly. This
can cause claim rejections and revenue losses and pressure patients financially. That’s why training your
staff about claim processing workflows is vital.
You should encourage medical coders to register for the American Academy of Professional
Coders medical coding certification programs to help them achieve coding accuracy. Every employee
should know about insurance plans and payers’ guidelines.

Perform Insurance Verification

To assume that the same insurance provider still covers the client’s health care expenses is a grave
mistake. The client might change their health plan company over time.

Sending claims to the wrong insurance organizations will result in rejections. That’s why you should
always run benefits eligibility checks before appointments to reduce denials and determine financial
responsibility at an early stage.

Improve Clinical Documentation

Relying on short-hand notes is not the best practice. Traveling from department to department, they can
get lost in translation, causing miscommunication. And miscommunication gives birth to errors. That’s
why you should invest in electronic medical records to capture correct patient demographic, clinical and
insurance details.

Know Your Payers

Insurance companies keep changing their guidelines. For instance, Aetna changed its nonparticipating-
provider claim filing limit from 27 months to 12 months. That’s why it’s essential to stay updated about
insurance companies’ evolving rules for prior authorizations, referrals and medical necessities to reduce
denial rates.

Run Audits

Remember how our parents used to advise us to learn from our mistakes? You need to apply the same
rule to avoid denials too. You should generate denial reports to identify similar trends and resolve issues.

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Review Reason Codes and Statements

Centers for Medicare and Medicaid Services (CMS) contractors review claims and prior authorizations to
check whether or not the services billed for follow Medicare guidelines.

If the review results in a denial or non-affirmed decision, contractors provide a detailed explanation with
review reason codes and statements.

Because it’s challenging to understand denial codes from different providers, CMS developed a
standardized list to make it easy. They added a new set of generic reason codes and statements to Part
A, Part B and durable medical equipment.

Access the current list of review reason statements and document codes to avoid future denials.

Where Are Denial Codes Located?

You can find denial codes on electronic remittance advice. It includes details about claim processing,
covering payment or denial information.
We’ve highlighted some codes that you can find in electronic remittance advice below.

Claim Adjustment Group Code

Claim adjustment group codes contain two alpha characters that determine financial responsibility for
the unpaid amount of the claim balance. Health plan companies use them in conjunction with claim
adjustment reason codes.

We’ve listed the five claim adjustment group codes below.

 Contractual Obligation (CO): Assigns financial responsibility to medical providers based on

their payer contracts, often leading to the write-off of claim balances.

 Corrections and Reversal (CR): Indicates health plan companies’ correction or reversal of a
previously adjudicated claim. Paired with PR, CO or OA to signify revised information.

 Other Adjustment (OA): Signifies that no other code fits the adjustment criteria.

 Payer Initiated Reductions (PI): Demonstrates that the adjustment isn’t the client’s
responsibility.

 Patient Responsibility (PR): Denotes denials that assign financial responsibility to patients or
their secondary insurance provider, encompassing deductibles, copays and coinsurance.