CO 97 Denial Code: Description, Causes, and Solutions

 When the benefit of a service is already included in the payment of another procedure, the insurer denies the claim. This denial code is referred to as CO 97. It is caused by bundling rules and missing modifiers. The practice can identify a CO 97 denial on the Explanation of Benefits (EOB) details. 

However, this denial code leaves a negative impact on the revenue cycle of a practice. Therefore, applying proper modifiers and reviewing bundling policies is the key to fixing CO 97 denials. The providers also need to conduct regular audits of the claims to identify bundling issues before submission. Training the staff on correct modifier usage and payer-specific billing guidelines reduces CO-97 denials.

What is the CO 97 Denial Code?

According to the Centers for Medicare  & Medicaid Services, a CO 97 denial code indicates that the payment for a billed service is denied when it is already included in another reimbursed service. 

CO-97 denial typically occurs due to the overlapping and bundling errors, along with the failure to apply correct modifiers. Additionally, sometimes, it also stems from the lack of medical necessity and omission of supporting clinical documentation. However, establishing internal workflows along with denial tracking help sustain a healthy cashflow.

Common Causes of CO 97 Denial Code

1. Unbundling Errors

When insurers consider multiple procedures as a single comprehensive package, it is referred to as a bundled service. The payer denies the claim under CO 97 denial code if the providers bill the services separately. This leads to unbundling errors.

2. Duplicate Billing

When a provider bills the same service a couple of times unintentionally, the payer denies the duplicate claim. It falls under CO 97 if the insurer treats the secondary claim as bundled.

3. Global Period Issues

A global period is the timeframe that includes post op visits in the original payment. If a provider bills separately for routine follow-up visits, the insurer denies it. That is because the payers consider it a bundled surgical package, hence it falls under the CO 97 denial code.

4. Incorrect Coding

The use of incorrect or outdated codes mismatches the services. These codes misalign with the payer-specific rules, causing CO 97 denial. That is because the service rendered falls under another reimbursed code in the payer system.

5. Specimen Collection

Most of the payers consider specimen collection as a part of the laboratory test payment. When the providers bill the specimen collection separately, it results in the CO 97 denial.

6. Failure to Use Add-On Codes

The add-on codes represent the additional procedures performed with the primary service. These procedures are not to be billed separately. If the providers bill them alone, it triggers CO 97 denial. Therefore, it is essential to include add-on codes with the original rendered procedure.

7. Multiple Procedures without Proper Sequencing

When multiple procedures are performed on the same patient, it is important to apply proper sequencing. This determines which procedures are reimbursable. 

Failure to do so results in the overlap where the insurer considers some procedures a part of others. All leading to CO 97 denials.

8.  Therapy and Rehab Services Overlap

Therapy or rehab services usually consist of multiple sessions. Billing them close together sometimes leads the insurer to think of the other as a duplicate. Therefore, it is important to provide proper documentation for each service or session.

Otherwise, the insurer denies separate payment under the CO 97 denial.

How to Identify a CO 97 Denial on Your Claim?

Identifying a CO 97 denial on the claim is the first step to resolving it efficiently. By carefully reviewing the claim details and supporting documentation, the providers identify which service triggered the denial. This way, they can take necessary actions towards it.

This process of identifying a CO-97 denial involves the following steps:

• Check Explanation of Benefits (EOB)
• Identify Related Paid Services
• Use Clearinghouse
• Compare Billed vs Allowed Amounts
• Audit Related Procedures
• Review Documentation for Medical Necessity
• Consult the Payer Policy for Bundling Rules
• Ensure Proper Sequencing

How to Fix the CO 97 Denial Code?

1. Analyze Denial Reason in Depth

There are several reasons why the claim is denied under CO 97. Therefore, to fix the denial code, it is important to analyze the reason in depth. The practice will need to figure out whether the procedure was really a separate service. 

Reading the details of EOB (Explanation of Benefits) helps identify the core denial reasons of a claim.

2. Add Correct Modifiers

Sometimes, when the procedures are done on the same day, the insurer usually identifies them as one. So if two procedures are truly separate and distinct from one another, adding the correct modifier fixes it. 

The providers need to add the right modifier (a short code) along with the CPT code. This helps explain why the services need to be paid separately.

3. Clear Explanation in Appeal Letter

If the practice is writing an appeal for a claim that needs to be paid separately, the letter has to contain proper documentation. It also needs to explain the reason clearly. This helps support your appeal letter to the insurer.

4. Monitor Reprocessed Claims for Resolution

Sending in the appeal letter is not the end. The practice needs to monitor reprocessed claims regularly until they’re fully processed. This helps ensure that the appeal claim will get paid.

5. Follow up Promptly on Outstanding Appeals

If there is no response to the outstanding appeals, the practice will need to follow up immediately. Waiting for a longer time risks missing the appeal deadlines. The need for a follow-up usually arises after 30 days of an unanswered appeal.

6. Analytics to Prevent Repeat Denials

Tracking the previous CO 97 denials helps prevent the future ones. The practices need to look for similar patterns to fix the root cause. This helps the claim from the CO 97 denial from the same previous reasons. 

What are the Prevention Strategies for CO 97 Denials?

1. Conduct Regular Staff Training

The practices need to conduct regular staff training to avoid CO 97 denials. This helps in identifying how and when the services are bundled. Learning the bundled services will automatically reduce mistakes that lead to CO 97 denial.

2. Pre-submission Claim Scrubbing

Using claim scrubbing tools before submission helps identify common triggers for CO 97 denial. It helps the practice to check the documentation and add a modifier if needed.

3. Verify Global Periods

When billing for the services after a surgery, make sure to check if they fall within the global period. Verifying the global period ensures that the practice only submits claims for unrelated services. This helps reduce the chances of CO 97 denial.

4. Maintain Accurate Records

Maintaining a detailed and accurate record of each claim helps prevent denial. If the insurer denies a claim under CO 97, the practice will be able to file for an appeal with reasonable documentation.

5. Conduct Periodic Internal Audits

Periodic internal audits catch the repeated patterns of CO 97 denials. It helps reduce the chances of denial in the future by avoiding the same mistakes. 

How CO 97 Denial Affects Cash Flow?

1. Delayed Reimbursements

A CO 97 denied claim does not pay the provider unless the claim is corrected. This delay slows down the reimbursements. It also affects the ability to cover the daily expenses of a small clinic.

2. Increased AR Aging

Denied claims remain in the Accounts Receivable if not resubmitted quickly. A growing number of unpaid CO 97 claims increases the AR aging. This affects the cash flow of a practice, reducing monthly collections.

3. High Administrative Costs

Fixing the CO 97 denial requires extra staff and time. They recheck codes, review documentation, file appeals, and take timely follow-ups. This administrative cost reduces the overall profit of the practice.

4. Impact on Provider’s Operational Budget

The constant cash flow disruptions due to CO 97 denial affect the operational budget of a practice. It includes the provider’s ability to invest in technology and pay their staff on time.

How Prime Doc Billing Helps Prevent CO 97 Denials?

Prime Doc Billing has certified coders and billers who understand bundling rules and modifier usage. This ensures claim accuracy and reduces the risk of CO 97 denial. We also work closely with the providers to ensure the chart notes support all the billed services.

Our proactive medical coding strategies track the problem from its root and correct it before it reaches the insurer. Our team also keeps the providers in the loop with all the processes to help prevent mistakes before they happen.

 

Frequently Asked Questions

1. Can modifier 59 help with CO 97 denial?

Yes! The modifier 59 reasons with the payer that a service is independent and distinct from the other procedure.

2. How long does it usually take to resolve a CO 97 denial appeal?

It usually takes about 30 days to resolve a CO 97 denial. However, it depends on the type of payer and appeal.

3. What’s the difference between CO 97 and CO 16 denial codes?

CO 97 denial occurs when the benefit of a service is already included in another paid service. Whereas, CO 16 denial occurs when the claim lacks important information.

References

Centers for Medicare & Medicaid Services. (n.d). National Correct Coding Initiative (NCCI) edits. U.S. Department of Health and Human Services.