Denial Codes

Denial codes are standardized codes used by payers to explain why a claim was denied, reduced, or adjusted. They help billing and revenue cycle teams understand what went wrong and what action is needed to resolve the issue. These codes appear on Explanation of Benefits (EOBs) or Electronic Remittance Advice (ERAs)

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Common Types of Denial Codes

• CO (Contractual Obligation): Indicates amounts the provider cannot bill the patient due to contractual agreements with the payer.
• OA (Other Adjustment): Used for denials or reductions that don’t fall under standard categories.
• PR (Patient Responsibility): The denied amount is the patient’s responsibility, such as copays, deductibles, or non-covered services.
• PI (Payor Initiated Reduction): Adjustments made by the payer based on internal policies or processing rules, often without provider error.