Payer systems thoroughly scrutinize claims, and even the smallest errors can result in your filing being rejected. Therefore, providers must know how these payers operate to secure their rightful funds.
If you don’t fix repeated denials, you leave money on the table. But once you understand the logic behind every rejection code, you can make sure your claims are accepted the first time. And the only way to do so is to have the right knowledge about claim denials’ nitty-gritty details.
That’s why this blog focuses on a common denial code in medical billing, i.e., CO-97, and explains everything about it. Keep reading to remove one reason from the list of claim denials affecting your practice.
What Does CO-97 Denial Code Mean?
Every denial in medical billing starts with a claim adjustment group code, which suggests who is responsible for the payment when the insurance payer is not.
The two main group codes are CO and PR.
- CO = Contractual obligation, meaning the provider is responsible for the balance, and the patient cannot be billed.
- PR = Patient responsibility. A PR denial means the payer has decided that the patient must cover that specific amount.
That said, CO-97 is a contractual denial that indicates a procedure or service you billed was bundled with another service performed on the same day. Put simply, the payer says that they have already paid for the said service as part of a larger package, and you claiming for it again is invalid.
Since insurance companies use software to catch codes that overlap, they group related tasks and don’t pay for every line item on a claim. So if you claim a minor task that the payer thinks is part of another procedure, their software triggers a CO-97 to avoid paying twice for the same work.
Some Examples of a CO-97 Denial
A CO-97 denial doesn’t show up for a certain procedure or situation. Instead, it’s applicable for virtually any healthcare service where you consider two things are separate, while the payer sees them as one.
Here are some examples where you’ll likely get a CO-97 denial code:
- Surgical Supplies: When the provider bills for bandages, gauze, or anesthesia used during a procedure, the claim will be denied because payers consider these part of the surgical fee.
- Lab Sample Collection: Charging a fee for blood draws during a regular office visit may appear as an individual procedure, but payers usually bundle it into the visit fee.
- Post-Op Follow-ups: If a patient is still in their 10-day or 90-day recovery window after surgery, charging them a regular office visit fee will trigger this denial.
- Minor Procedures During Surgery: Billing for a simple incision or drainage at the same site where you are already performing a major operation will deny your claim.
- After-Hours Fees: When a clinic is officially a 24/7 or urgent care facility, charging an extra fee for late-night visits will make CO-97 applicable.
Reasons You Get CO-97 Denial Code on Insurance Claims
CO-97 code allows insurance companies to avoid paying for the extra time and resources you provided. Labeling a separate service as included in a larger procedure may keep your rightful money in their accounts. To break this cycle, you must understand the factors that make your work appear like a package deal.
Here are some reasons behind a CO-97 denial code:
Bundled Services
As explained earlier, bundling refers to the practice of combining multiple service codes into one payment. Since insurance software is programmed to recognize inclusive tasks, it identifies a group of related services and pays for them as a package deal.
So if the payer decides that a service you billed is already covered by the payment for another, they’ll return your claim with a CO-97 denial code.
For instance, if you bill for an EKG (electrocardiogram) on the same day as a cardiac stress test, the payer may bundle the EKG as a necessary step of the larger test rather than an independent service.
| Note: Don’t bill for steps of a larger procedure, such as closing a wound after a surgery, as they are inclusive tasks and trigger a CO-97 denial. |
Global Surgery Rules
The global surgery period is the timeframe during which all care related to a procedure is covered by a single payment. This package includes the surgery, postoperative care, and routine follow-up visits until you exceed the specified window (typically 10 to 90 days).
The global surgery rule exists to simplify billing and bundle every necessary step of a surgical event into a lump sum rather than paying for dozens of separate appointments.
That said, when you bill for a service that falls within the said window, a CO-97 denial happens. For example, if you see a patient to remove sutures a week after surgery, billing an office visit code will trigger this denial because it’s part of post-op care.
Incorrect Coding Pairs
By “incorrect coding pairs,” we mean sets of billing codes that insurers have flagged as incompatible. The core idea is the same: the insurance company believes that if you perform two services together, one is naturally a part of the other.
Payers follow the National Correct Coding Initiative (NCCI) edits, and these rules prevent “unbundling,” i.e., the practice of breaking one procedure into several smaller parts to increase billing. So if you see a CO-97 denial for this reason, the payer thinks the secondary code you billed is unnecessary because the primary code already covers that work.
This issue often happens when a coder is too detailed. For example, if a provider performs a surgery and bills separately for opening the site and closing the wound, the payer will surely issue a CO-97 denial as these tasks are part of the surgery.
Routine Supplies
Payers categorize routine supplies (such as bandages, local anesthesia, gauze, etc.) used during a healthcare procedure as part of the provider’s cost of doing business. When a practice tries to bill for every bandage or syringe used as a separate line item, they receive a CO-97 denial. For example, if you perform a skin biopsy and bill for the disposable tray and the sterile gloves separately, the payer will flag those codes.
Mutually Exclusive Procedures
Mutually exclusive procedures are two services that, by medical definition, cannot both be performed together. These are “either/or” situations, and if you bill for both, the payer will only reimburse one and issue a CO-97 denial for the other.
For instance, if a provider bills for an initial hospital visit and a follow-up hospital visit for the same patient on the same date, the payer will deny the second code. Since you cannot start a new care episode and continue an existing one, a CO-97 denial code is inevitable.
Steps to Resolve and Fix CO-97 Denials
Profitability and overhead costs are locked in a constant tug-of-war. Every dollar spent on administrative friction is a dollar taken from your bottom line. Therefore, it’s in your best interest to nip the problem in the bud and fix things before they clog the payment pipeline.
If you’re noticing a CO-97 denial on your claims, here are some ways to fix it:
Check the NCCI Edits
The National Correct Coding Initiative (NCCI) is the rulebook that decides which codes can be billed together. In case of a CO-97 denial, check the NCCI edit tables to see if your code combination is restricted. These tables list “Column 1” and “Column 2” codes that are considered bundled, so comparing your claim against these tables will identify which secondary code triggered the denial.
Verify the Global Period
There is a set period after surgery during which all related follow-up care is prepaid. If your claim comes back with a denial, you must verify if the patient was still within this 10-day or 90-day window on the date of service. In case the patient’s visit was for routine recovery, the denial is correct. But if the care was for an unrelated issue, you can re-file with the appropriate modifier.
Apply the Correct Modifiers
Modifiers are codes that inform a payer that two services are separate. If your clinical documents prove that a service was not part of a bundle (like a procedure on a different body part), you can fix a CO-97 denial by adding a modifier like 59 or XS. It’ll break the automated bundle and tell the payer’s software to process the code independently.
File a Corrected Claim
If a CO-97 denial is due to a clerical error, don’t let it be; definitely file a corrected claim. You can update the original claim with the missing modifier or the correct primary code to resubmit the claim. Marking the claim as “Corrected” will help ensure that the payer does not deny it as a duplicate.
Appeal with Evidence
An appeal is your final effort if a payer incorrectly bundles clinically separate services. You are required to submit a formal appeal package containing the patient’s medical records and a clear cover letter to overrule a CO-97 denial. If you have clinical notes documenting that the services occurred at different anatomical sites or during distinct sessions, the payer will need to override its automated system. They’ll manually verify that both services were medically necessary and warrant separate payment.
| Note: When appealing a CO-97 denial, your best evidence is the operative report or clinical note. If the notes don’t clearly describe two separate tasks, the appeal will fail. |
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Conclusion
Insurance reimbursement is probably the most stressful administrative task in medical billing because of the million rules to follow. The billing staff is expected to be super clear and detail-oriented with everything because otherwise, claims will stay stuck.
But providers must not worry. BilNow’s all-rounder team is there to make the whole process more fruitful. Our full-suite medical billing services will get you a 99% first-pass claim acceptance rate and a 25% higher revenue within months. So let the experts do their job and never let system complications hold up your payments.
FAQs
Can a provider bill the patient for a CO-97 denial?
No, a CO-97 is a contractual adjustment, not a patient responsibility. Since the payer considers the service part of a larger procedure, the provider must write off the balance. If a provider tries to bill the patient for this amount, it violates their contract with the insurance company.
Does a CO-97 denial mean the service wasn’t necessary?
No, it means the payer thinks the service is already included in the price of another code. This denial doesn’t mean the procedure or service provided was useless; it indicates that the insurer already paid for it through the main procedure’s fee.
Does a CO-97 denial impact my clean claim rate?
Any denial lowers your clean claim rate because it stops the payment and requires more work to fix. Frequent CO-97 denials mean that your billing team should review coding errors before submitting claims.
