Common claim denial codes and how to fix them

How to read claim denial codes

When a payer adjusts or denies a claim, the electronic remittance (the 835 ERA) or paper EOB explains why with a set of standard codes:

• Group code. Two letters that say who is financially responsible for the adjusted amount.
• Claim adjustment reason code (CARC). A number that says why the payment differs from the billed charge.
• Remittance advice remark code (RARC). An additional code, starting with M, MA or N, that adds detail. With broad reason codes, the remark code is often where the real answer is.

These code lists are maintained nationally and updated several times a year, so the descriptions below are plain-English summaries. Always read the full remark codes on your own remittance.

Group codes: CO, PR, OA and PI

• CO (contractual obligation). The provider is responsible for the amount. Under most network contracts, you can’t bill the patient for a CO adjustment.
• PR (patient responsibility). The patient owes the amount, usually a deductible, coinsurance or copay.
• OA (other adjustment). Used when neither CO nor PR applies, often in coordination of benefits situations.
• PI (payer initiated reduction). The payer considers the amount outside the patient’s responsibility, but no contract between you and the payer covers it.

The same reason code can appear with different group codes. CO-50 and PR-50 share a reason and differ on who pays.

Common claim denial codes and how to fix them

CO-16: claim lacks information or has a billing error

Something on the claim is missing or invalid. CO-16 is broad, and the remark code that comes with it tells you what went wrong: a missing referring provider, an invalid date, a missing modifier, or a subscriber ID that doesn’t match the payer’s records.

Fix: read the remark code, correct the field and resubmit. CO-16 denials usually don’t need a formal appeal. Track which fields trigger them, because the same error repeats until it’s fixed at registration or in your claim scrubber rules.

CO-18: exact duplicate claim or service

The payer believes it already received this claim. It often happens when a claim is resubmitted while the original is still processing, or when a corrected claim is sent as a brand-new claim.

Fix: check the status of the original claim first. If it’s paid or pending, leave it alone. If you meant to correct a claim, resubmit it with claim frequency code 7 (replacement) and the original claim number. If the services really were separate, such as the same procedure performed twice on one day, resubmit or appeal with the modifier and documentation that show it.

CO-22: may be covered by another payer (coordination of benefits)

The payer believes another plan is primary. Sometimes that’s true. Often the patient’s coordination of benefits record with the plan is simply out of date.

Fix: confirm coverage with the patient. If another plan is primary, bill it first, then send the secondary claim with the primary payer’s remittance. If this plan really is primary, the patient usually has to update their coordination of benefits information with the plan before it will reprocess the claim.

CO-29: time limit for filing has expired

The claim reached the payer after its timely filing limit. These are hard to overturn.

Fix: appeal only if you can prove timely submission, such as a clearinghouse acceptance report or payer acknowledgment showing the claim arrived within the limit. Without that proof, it’s usually a write-off. The lasting fix is upstream: work clearinghouse rejections daily and read your aging report as a list of deadlines.

CO-45: charge exceeds the fee schedule or contracted amount

CO-45 is the routine contractual adjustment, the difference between your billed charge and the amount your contract allows. It appears on most paid claims, and it isn’t a denial.

Fix: no action is needed as long as the allowed amount matches your contract. That comparison is the step most practices skip. If the payer allowed less than your contracted rate, you were underpaid, and CO-45 is where underpayments hide.

CO-50: not deemed medically necessary

The payer doesn’t consider the service medically necessary for the diagnosis billed. Common causes are a diagnosis code that doesn’t meet the payer’s coverage policy, or documentation that doesn’t show why the service was needed.

Fix: check the diagnosis coding first. If the chart supports a more specific or different diagnosis, correct and resubmit. If the coding was right, appeal with the clinical notes and the payer’s own coverage policy, or for Medicare, the applicable local or national coverage determination. When you expect Medicare may not cover a service, a valid Advance Beneficiary Notice signed before the service can shift liability to the patient.

CO-97: payment included in another service

The service is bundled into another procedure paid on the same claim or date. Medicare and Medicaid apply NCCI edits, and many commercial payers use similar bundling rules.

Fix: check whether the edit allows a modifier. If the service was truly distinct, for example at a different site or in a separate session, and the documentation shows it, modifier 59 or one of the X modifiers may apply. For a significant, separately identifiable E/M service on the same day as a procedure, modifier 25 may apply. Add modifiers only when the note supports them, because payers audit modifier 59 and 25 use closely.

CO-197: precertification or authorization absent

The service required prior authorization, precertification or notification, and the payer has no record of it.

Fix: if you did obtain authorization, appeal with the authorization number and confirm it covers the code, dates and provider billed. If you didn’t, some payers allow retroactive authorization in limited situations, such as urgent or emergency services. Otherwise it’s usually a write-off you can’t pass to an in-network patient. Prevention belongs at scheduling: check authorization requirements when the service is booked.

PR-1 and PR-2: deductible and coinsurance

These are patient responsibility amounts. PR-1 is the deductible and PR-2 is coinsurance, and PR-3 is the copay. The claim processed correctly and the payer applied the patient’s cost sharing.

Fix: if the patient has secondary coverage, send the claim there first. Then bill the patient for what remains. Large deductible balances early in the plan year are normal, which is a good reason to verify benefits and collect estimates at the visit.

Turning denial codes into fewer denials

Working each denial fixes one claim. Tracking the codes fixes the process. Group a month of denials by reason and remark code, then by payer and provider, and the root causes usually show up quickly. CO-16 and CO-22 point to registration, CO-197 to scheduling, CO-50 to documentation, and CO-97 to coding. Our guide to reducing claim denials walks through that process, and our claims and denial management team works denials and appeals for practices across specialties.

If you want to see which codes are costing you the most, our free A/R audit breaks down ninety days of claims by denial reason, payer and provider. Request your free A/R audit.