CO-97 means the service was considered bundled and already paid as part of another procedure, so no separate payment is allowed.
The payer believes the denied service is included in a primary service on the same claim or date of service, rather than being a separately reimbursable item.
Understanding CO-97 helps you determine whether the denial is correct, needs a modifier, requires documentation support, or should not be billed separately at all.
We’re going to break down everything you need to know to understand it, resolve it when it happens, and, most importantly, put strategies in place to prevent it from happening in the first place.
Description Of Denial Code CO 97
The description of denial code 97 is ”The benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated.”
The CO 97 denial occurs when an insurance payer determines that the service billed is part of a larger procedure that has already been reimbursed. Payers follow specific bundling rules based on National Correct Coding Initiative (NCCI) guidelines and payer-specific policies to avoid duplicate payments for services that should be billed together.
For example, a provider performs a minor surgical procedure and submits a separate claim for post-operative care. If the insurance company finds that post-operative care is included in the global surgical package, they may deny the claim with CO 97.
Insurance companies use Claim Adjustment Reason Codes (CARC) and Remittance Advice Remark Codes (RARC) alongside CO 97 to provide additional clarification on why the service is denied.
Examples of CARC and RARC Associated with CO 97
- CARC 97 – Service is included in another procedure.
- RARC M15 – Separately billed services/tests have been bundled.
- RARC N20 – Payment for the procedure is included in another service provided on the same date.
Bundled Services: What Does “Bundled” Really Mean?
Imagine you’re buying a combo meal at a restaurant. You order the “Deluxe Burger Combo,” and it includes a burger, fries, and a drink, all for one price. You wouldn’t expect to pay separately for the burger, then again for the fries, and then again for the drink, right? It’s all bundled together in one price.
Bundled services in medical billing are kind of similar. Insurance companies often consider certain services to be inherently related and provided together during a patient encounter. They create “packages” where payment for one main service is intended to also cover any smaller, related services performed at the same time.
When you bill for services that the payer considers bundled, they’ll deny the smaller, “bundled” service with a CO-97 code, letting you know that the payment for that service is already included in the payment for the “main” service they are paying.
Common Causes of CO-97 Denial
There are several reasons why a claim may receive a CO 97 denial. Below are the most common causes:
1. Bundled Services Under NCCI Edits
Some services are considered bundled under the National Correct Coding Initiative (NCCI) edits, meaning they should not be billed separately. For example, pre-operative and post-operative visits are often included in a surgical global package, so billing them separately may result in a CO 97 denial.
2. Duplicate Billing
Submitting a claim for the same procedure multiple times can lead to CO 97 denial if the insurance company identifies it as a duplicate. For instance, if a provider performs a lab test and submits separate claims for different components of the same test, the insurer may consider them bundled and deny payment.
3. Unbundling of Procedures
Some providers may attempt to unbundle procedures to increase reimbursement. However, insurance payers have strict rules that prevent unbundling, and if they determine that a service is already included in another billed procedure, they will issue a CO 97 denial.
4. Improper Use of Modifiers
Certain procedures require modifiers to indicate that a service is separate from another bundled service. Failure to use the correct modifier (such as Modifier 59 for distinct procedural services) can result in CO 97 denial because the payer assumes the service is part of the primary procedure.
5. Billing for Incidental Services
If a provider bills for services that are considered incidental to a major procedure, the insurance company may deny the claim under CO 97. For example, if a routine dressing change is billed separately from a surgical procedure, it may be denied because it is considered part of the overall surgery.
How to Fix CO 97 Denial
Seeing a CO-97 denial doesn’t mean it’s the end of the line. You have options! Here’s a step-by-step approach to resolving CO-97 denials
1. Review the Explanation of Benefits (EOB)
The first step in resolving a CO 97 denial is to carefully examine the Explanation of Benefits (EOB) provided by the payer. The EOB will often include remark codes explaining why the service was denied and what corrective action should be taken.
2. Check NCCI Edits and Payer Policies
Before resubmitting a denied claim, check the National Correct Coding Initiative (NCCI) edits and the payer’s policies to confirm whether the service should be billed separately. If the service is indeed bundled, rebilling will likely result in another denial.
3. Use the Correct Modifiers
If the service was separate and distinct from the bundled procedure, use the appropriate modifier to indicate this. Modifier 59 is commonly used to show that a procedure is separate from a bundled service, but it should be used only when appropriate to avoid compliance issues.
4. Submit a Corrected Claim
If the denial was due to an incorrect claim submission, providers should make the necessary corrections and submit a corrected claim with supporting documentation explaining why the service should be paid separately.
5. Appeal the Denial if Necessary
If the payer incorrectly applied CO 97 denial, providers can file an appeal with supporting documentation, such as:
- Physician notes
- Operative reports
- Medical necessity justification Appealing denials with strong supporting evidence can lead to successful claim approval and reimbursement.
Tools and Resources to Help You Navigate CO-97 Denials
Managing bundled service denials doesn’t have to be a constant struggle. Utilize these helpful tools and resources:
- NCCI Edit Resources (CMS Website): The Centers for Medicare & Medicaid Services (CMS) website provides detailed information and downloads of NCCI edits.
- Payer-Provider Manuals and Websites: Each insurance company’s provider manual (often available on their website) is your go-to source for payer-specific bundling guidelines.
- Coding Software and Edits Checkers: Many coding software programs and online coding tools have built-in edits checkers that can help identify potential bundling issues based on NCCI and payer-specific rules.
- Claim Scrubbing Software: Claim scrubbers are valuable for pre-claim submission denial prevention.
- Professional Coding and Billing Associations: Organizations like AAPC and AHIMA offer resources, education, and certifications related to coding and billing compliance, including denial management.
Preventive Measures to Avoid CO-97 Denials
Resolving denials is important, but preventing them in the first place is even better! Here are key preventive measures to minimize CO-97 denials.
- Stay Updated on Coding Changes: Regularly review coding updates from the Centers for Medicare & Medicaid Services (CMS) and payer-specific policies to ensure compliance with billing guidelines.
- Perform Pre-Billing Audits: Conduct internal audits before submitting claims to check for errors related to bundling and unbundling of services. This can help prevent unnecessary denials.
- Educate Billing and Coding Staff: Regular training sessions for billing and coding staff can help them understand when services should be billed separately and when they are bundled. Proper training reduces errors and improves claim accuracy.
- Verify Modifiers Before Submission: Using modifiers incorrectly can lead to CO 97 denials or potential compliance issues. Always verify modifier usage according to the payer’s specific guidelines before submitting a claim.
- Check Insurance Payer Policies: Each insurance company has different bundling rules. Verifying payer-specific guidelines before claim submission can help prevent unnecessary denials.
Documentation: Your Best Defense Against CO-97 Denials
Thorough documentation is crucial for preventing and appealing CO-97 denials. Accurate, detailed records ensure compliance, justify unbundling, and protect against audits.
- Supporting Modifier Usage & Unbundling: When using modifiers -59 or -25, your documentation must prove that services were distinct, separately identifiable, and medically necessary. Vague notes won’t hold up on appeal.
- Demonstrating Medical Necessity: Even typically bundled services may qualify for separate payment. Document why the additional service was essential and not a routine component of care.
- Protecting Against Audits: Payer audits are common, but clear, complete documentation strengthens your case. Consistently detailed records support compliant coding, reduce denials, and safeguard reimbursements.
Final Words
CO-97 denials, while common, don’t have to be a mystery or a major drain on your revenue. By understanding the concept of bundled services, staying updated on coding and payer guidelines, and implementing proactive prevention and management strategies, you can significantly reduce CO-97 denials and ensure accurate and timely payment for the services you rightfully deserve.
