CO-173 Denials Explained: How to Identify, Appeal, and Prevent Them

Denials are a critical pain point for healthcare revenue cycle management (RCM) teams, disrupting cash flow and increasing operational burdens. One common yet frustrating denial code is CO-173, often associated with missing physician prescriptions for services or equipment.

In this article, we’ll break down the CO-173 denial code, how to address it through appeals, and strategies to prevent it altogether. By understanding this denial type, RCM teams can reduce revenue leakage and improve overall efficiency.

What Is a CO-173 Denial?

The CO-173 denial code indicates that a claim was denied because the service or equipment was not prescribed by a physician, as required. The prefix CO, or Contractual Obligation, signifies that the payer has determined the provider is financially responsible for the denied amount. This makes it essential for providers to address and resolve the issue promptly to avoid lost revenue.

CO-173 denials are common in cases where clinical documentation or prescription orders are incomplete, making it imperative for RCM teams to ensure all claims meet payer requirements before submission.

Comparison: CO-173 vs Similar Denial Codes

Denial Code	Prefix Meaning	Reason/Description	Who's Financially Responsible
CO-173	Contractual Obligation	Service/equipment was not prescribed by a physician.	Provider
CO-16	Contractual Obligation	Claim/service lacks information or has submission errors.	Provider
CO-151	Contractual Obligation	Payment adjusted because the payer deems the information insufficient.	Provider

While CO-173 specifically relates to missing physician prescriptions, other codes like CO-16 and CO-151 are broader, covering general information errors or insufficient documentation. These distinctions highlight the importance of identifying the root cause of each denial.

Common Causes of CO-173 Denials

1. Missing Physician Prescription: Claims submitted without the required physician order for services or equipment.
2. Incomplete Documentation: Physician prescriptions that are missing details like dates or signatures.
3. Failure to Verify Payer Requirements: Not confirming with the payer whether a prescription is required for the specific service or equipment.
4. Delayed Submission: Submitting claims after the prescription validity period has expired.
5. Miscommunication Between Departments: Lack of coordination between clinical and billing teams leading to incomplete or missing documentation.

Impact on Revenue Cycle Teams

CO-173 denials can create ripple effects across healthcare organizations, impacting both financial and operational performance.

Financial Impact:
- Loss of revenue due to uncollectible claims or write-offs.
- Increased accounts receivable (AR) days, delaying cash flow.
- Higher costs associated with denial rework and appeals.
- Lost productivity and resources, as staff focus on resolving avoidable denials.

Operational Impact:
- Increased workload for billing and denial management teams.
- Disruptions in workflows due to back-and-forth communication with clinical teams.
- Need for rigorous monitoring of prescription compliance.
- Strain on resources to track trends and implement corrective actions.

To mitigate these challenges, RCM teams must adopt robust denial management processes. CombineHealth.ai’s AI-powered platform, including Adam (AI Denial Manager), enables teams to identify and resolve CO-173 denials efficiently, reducing operational strain and improving financial outcomes.

Steps To Appeal a CO-173 Denial

If your organization receives a CO-173 denial, follow these steps to resolve it efficiently:

Step 1: Review the Denial Notice
Carefully examine the explanation of benefits (EOB) or remittance advice (RA) to confirm the denial reason and identify missing documentation.

Step 2: Gather Documentation
Collect the required physician prescription, ensuring it includes all necessary details like patient name, service/equipment description, and physician signature.

Step 3: Verify Eligibility
Confirm that the patient was eligible for the service or equipment at the time it was provided, including checking policy-specific requirements.

Step 4: Prepare Appeal Letter
Draft a detailed appeal letter addressing the denial reason. Include supporting documentation, such as the corrected prescription, medical records, and the original claim.

Step 5: Submit Within Deadline
File the appeal within the payer’s specified timeframe to avoid forfeiture of reimbursement.

Step 6: Track and Follow Up
Monitor the status of the appeal and engage with the payer as needed to ensure timely resolution.

How To Prevent CO-173 Denials

Preventing CO-173 denials requires a proactive approach involving front-end processes, billing best practices, and leveraging technology.

Front-End Prevention

• Implement Robust Pre-Billing Checks: Verify that all services or equipment requiring a prescription have valid physician orders before claim submission.
• Train Staff on Payer Requirements: Educate front-end staff on the specific documentation requirements for each payer and service type.

Billing Best Practices

• Conduct Regular Documentation Audits: Ensure that physician prescriptions are complete and compliant with payer guidelines.
• Establish Clear Communication Protocols: Foster collaboration between clinical and billing teams to streamline documentation gathering.

Technology Solutions

• Automate Documentation Verification: Use AI tools to flag missing or incomplete prescriptions during the claim preparation process.
• Integrate Real-Time Claim Scrubbing: Implement CombineHealth.ai’s advanced claim scrubbing technology to catch and address errors before submission.

With Adam (AI Denial Manager), RCM teams can predict denial risks, while Rachel (AI Appeals Manager) simplifies the appeals process, ensuring faster and more accurate resolutions for CO-173 denials. Together, these tools empower providers to minimize manual effort and focus on maximizing reimbursements.

FAQs

Q1: What does CO-173 mean in medical billing?
CO-173 indicates that a claim was denied because the service or equipment was not prescribed by a physician as required by the payer.

Q2: Can CO-173 denials be appealed?
Yes, CO-173 denials can be appealed by providing the required physician prescription and supporting documentation.

Q3: How long do I have to appeal?
Appeal deadlines vary by payer but are typically between 30 and 180 days from the date of denial. Always confirm the specific timeline with your payer.

Q4: How can I prevent these denials?
Ensure all required documentation, such as physician prescriptions, is complete and accurate before claim submission. See our complete guide on denial prevention.