CO 97 Denial Code | Everything You Need to Know

Are you frequently facing CO 97 claim denials with your reimbursements being held? This blog delves into the specifics of these denials. We explain their common causes and offer detailed strategies to prevent them.

Also, mitigate the impact of claim denials through our medical billing expertise and top-notch denial management services.

CO 97 Denial Code Descriptions

The CO 97 denials result from the payment of a specific service being associated with an already processed payment of another service. This means that the relevant payer has already considered the cost of this service in their payment processed for the other service. It can be perceived as a healthcare provider attempting to get paid twice for a medical service.

Whereas, that service has already been covered as part of another one. You can learn more about such denials from the 835 Healthcare Policy Identification Segment. It is an important part of electronic remittance advice. The full form of CO is Contractual Obligation.

It is a category of claim denials that stems from the contract signed between insurers and hospitals. These claims are denied because the relevant services are not supposed to be billed separately. They have to be considered parts of an already covered larger medical service.

Common Reasons for the CO 97 Denial Code

Claim denials like CO 97 highlight the complexities of medical billing and coding. It particularly shows how medical services are grouped and reimbursed. Here’s a detailed look at the common reasons for CO 97 denials. We also have provided some additional factors that might lead to rejections:

• Bundled Services

Certain medical procedures are inherently considered to be part of another procedure or service. Such procedures may not be eligible for separate billing. This concept is known as the bundling of healthcare services.

Basic diagnostic procedures are included in the visit charge. They include taking blood pressure or routine examinations during an office visit. Administration of medication during a procedure is usually included in the procedure charge.

Therefore, insurance companies do not accept it being billed separately. The interpretation of diagnostic tests is typically bundled with the test itself. Such diagnostic tests primarily include X-rays and MRIs.

• E&M Services During Global Period

A period post-surgery is called global period and covered under the initial surgical charge. It commonly includes 90 days for major surgeries and 10 days for minor procedures. During this period, all types of follow-up care are related to the surgery.

Attempting to bill separately for post-operative visits or related E&M services will result in denials. All such instances during this period lead to claim denials unless specified as exceptions by the insurers.

• Failure to Identify Bundled Services

Providers may not always be aware of which services are considered bundled. They have to check with the latest coding guidelines or payer-specific rules to ensure that. Incorrectly coding individual components of a bundled service can also lead to denials.

• Payer-Specific Billing Guidelines

Each insurance company may have its own set of rules for what constitutes a bundled service. This can lead to variations in billing practices conducted by healthcare providers. This is why you must stay updated on these rules and ensure compliance to avoid denials.

• Adjudication System Identifications

Payers use sophisticated claims processing systems that automatically identify and deny claims. These claims are for those services that are likely bundled or included in another billed service. These systems are often programmed to flag claims. Such reimbursement claims typically deviate from expected billing patterns for bundled services.

How to Avoid CO 97 Denial Code?

Avoiding CO 97 claim denials requires a comprehensive understanding of medical billing protocols. You also have to proactively manage the entire billing process. This is how you can avoid the claim denials that indicate the costs of services bundled into the payments of other services. Let’s take a look at how you can address the reasons for such denials:

• Detailed Knowledge of Bundling Rules

Ensure that all your billing and coding personnel are trained on current bundling regulations. These regulations are defined by the Centers for Medicare & Medicaid Services and other insurers. Regular training sessions should be conducted to update staff on any changes

Use the latest ICD-10 and CPT coding manuals as well. They are updated on the details about the inherently bundled procedures.

• Proactive Service Management

This practice has to be conducted before performing and billing for any service. Verify whether a service is considered standalone billable or part of a bundle. This can be done via payer-specific online portals or direct inquiries to the insurer.

You can use an advanced medical billing software for this. It will automatically flag potential bundling issues before your claims are submitted.

• Global Period Compliance

Implement a system to track the post-operative global periods for surgeries. This system should alert staff whenever they bill services that fall within this period. Ensure that all your billers understand the restrictions associated with the global period. They should also be aware of which medical services are covered.

• Preventive Measures

This practice especially applies to the services during the global period that might not be typically included. For such services, you should obtain pre-authorizations from insurers to ensure their coverage.

There are also cases where separate billing within the global period is justified. In such cases, you should always ensure thorough documentation. It will support the necessity and independence of the medical services.

• Accurate Coding Practices

Conduct internal audits to identify and rectify frequent coding errors. With audits, you can also catch any misinterpretations regarding bundled services. Develop a feedback mechanism where coders can get real-time help.

Such a mechanism can also help them get clarification on bundling issues. They can be clarified from more experienced coders or through coding advisory services.

• Continuous Education and Updates

Regularly update your billing team about changes in bundling guidelines from CMS and private payers. Engage with payer education sessions and resources as well. It will help you better understand their specific bundling rules.

• Customized Billing Strategies

Create a payer-specific rule book for your billing team. It should comprehensively outline different rules for bundling as per each insurer. Develop relationships with payer representatives to gain insights and clarifications. This way, you can learn about the complex bundling rules and billing guidelines.

• Leverage Technology

Use smart billing systems that are equipped with the capability to identify and adjust claims. They can easily adjust your claims according to the payer’s adjudication logic. Keep the billing system regularly updated as well. It should be updated with the latest payer rules and software updates. This way, you can ensure compatibility with payer systems.

Use Cases for CO 97 Denial Code

There are various medical services that are usually bundled into other services. These services are not separately payable. Let’s take a closer look at some of them. Healthcare providers have to routinely collect blood specimens.

This service is usually provided during the patient encounter. As a result, you cannot consider it to be separately payable. There are special conveyances, transfers, and handlings of specimens. They are usually done from the doctor’s offices to laboratories.

These services are usually not separately payable. They are considered as an “extra” care for the patients. As a result, they are declared to be already in the payment fee schedules. Some E/M services are also not considered as separately payable.

These services are provided within the post-operative period of a surgery. They are often related to that particular surgery. It can be 10 and 90 days for minor and major surgeries respectively. There is an additional consideration for major surgeries.

Medicare-related insurances include the pre-operative visits made the day before the surgery date. Using after-hour codes is also not considered separately payable. This is definitely the case if the relevant healthcare practice is open 24/7.

How Is the Appending Modifier 59 Used?

CMS states that healthcare providers cannot separately report medical procedures as separate procedures. The reasoning is based on those procedures being performed in the same patient encounters as additional procedures. Those additional procedures have to be performed in an anatomically related area.

Surgeons should use the same orifice, surgical approach, or skin incision while providing them. In some cases, the relevant procedures can be either distinct from or unrelated to the major one. In this case, healthcare providers can assign codes to the separate procedures independently.

This practice requires the involvement of the modifier 59. You can use this modifier to represent different patient encounters. You can even represent different surgeries, sessions, or other procedures with it. There are different organ sites and systems as well that can be represented with it.

A separate body area, lesion, or excision/incision also applies to this modifier. However, you cannot use modifiers to unbundle all NCCI code pairs. The full form of NCCI is the National Correct Coding Initiative.

You cannot unbundle the code pair edits that have a “0” modifier indicator. Your medical coders must recognize whenever a separate procedure is crucial to the main procedure being billed. This is because such procedures are not always incorporated by NCCI edit tables.

How Health Quest Billing Helps Prevent Claim Denials?

Health Quest Billing offers a dynamic approach to reducing claim denials for hospitals. We deploy advanced predictive analytics to foresee and rectify billing issues. We are able to do this before those issues result in denials.

Our strategy involves a proprietary auditing tool that scrutinizes claims. It scrutinizes them against the latest payer rules and regulations. This way, it catches and corrects all the discrepancies in real-time.

Our specialized focus on denial management includes customizing feedback systems. They are applied to each of our hospital clients. This feature enables us to customize our approach based on specific challenges.

These challenges are being continuously faced by individual hospitals. Such customizations increase the accuracy of claims and significantly decrease the denial rates. Additionally, Health Quest Billing maintains direct relationships with insurance companies.

We facilitate better understanding and quicker resolution of their disputed claims. Our proactive approach effectively eliminates the financial impact of denials. It also improves the billing process of healthcare providers. This is how they are able to maintain a steady cash flow.

The Bottom Line

The CO 97 denials highlight the need to fully understand and follow the bundling rules. You should strictly verify service eligibility and obtain necessary pre-authorizations. Hospitals should maintain accurate coding practices as well.

They may also engage in continuous education on payer-specific guidelines. This way, they can effectively prevent the CO 97 denials. Contact Health Quest Billing to ensure that your medical services align with the payer regulations and are reimbursed.