CO-174 Denials Explained: How to Identify, Appeal, and Prevent Them

Denial codes are a persistent issue for healthcare revenue cycle management (RCM) teams, impacting efficiency and cash flow. Among these, CO-174 is a common denial that can lead to significant revenue leakage if not properly addressed. This denial code indicates a missing prescription prior to service delivery. Understanding how to identify, appeal, and prevent CO-174 denials is critical for maintaining financial stability and streamlining operations.

In this article, we’ll explore CO-174 denials in detail, covering their definition, causes, impact, and actionable strategies to appeal and prevent them. By the end, you’ll have the tools and insights to protect your organization’s bottom line.

What Is a CO-174 Denial?

CO-174 refers to a denial issued when a service or equipment was delivered without a prior prescription. It falls under the “Contractual Obligation” (CO) prefix, meaning the provider, not the patient, bears financial responsibility for the denial. This code indicates that a key payer requirement—obtaining a prescription before service delivery—was not met, making it crucial to address compliance gaps to avoid repeated issues.

Comparison: CO-174 vs Similar Denial Codes

Denial Code	Prefix Meaning	Reason/Description	Who's Financially Responsible
CO-174	Contractual Obligation	Service not prescribed prior to delivery.	Provider
CO-96	Contractual Obligation	Non-covered charges.	Provider
PR-204	Patient Responsibility	Services deemed not medically necessary.	Patient

CO-174 differs from other codes like CO-96 and PR-204 in that it specifically addresses the absence of a prescription, making it a preventable issue if proper front-end processes are in place.

Common Causes of CO-174 Denials

1. Missing Documentation: The prescription was not obtained before service or equipment delivery.
2. Miscommunication: Clinical staff failed to request or submit required documentation to billing teams.
3. Timing Issues: The prescription was acquired, but post-delivery, violating payer requirements.
4. Payer Policy Misalignment: Lack of awareness of specific payer rules regarding prescriptions and delivery timelines.
5. Errors in Claim Submission: Claims were submitted with incomplete or incorrect documentation.

Impact on Revenue Cycle Teams

CO-174 denials can create financial and operational headaches for healthcare organizations, requiring extensive resources to manage.

Financial Impact:
- Reduced revenue due to denied claims and potential write-offs.
- Increased accounts receivable (AR) days, disrupting cash flow.
- Additional costs associated with reworking denied claims and appeals.

Operational Impact:
- Resource strain as staff focus shifts to denial management.
- The need for payer-specific expertise to address documentation and compliance gaps.
- Increased coordination between clinical, billing, and coding teams to resolve issues.
- Difficulty tracking denial trends without advanced analytics tools.

To mitigate these challenges, healthcare organizations need robust denial management solutions. CombineHealth.ai’s AI-powered platform, featuring Adam (AI Denial Manager), automates denial identification, tracking, and resolution, reducing revenue leakage and administrative burden.

Steps To Appeal a CO-174 Denial

Step 1: Review the Denial Notice
Examine the payer’s explanation of benefits (EOB) or remittance advice (RA) to confirm the cause of denial.

Step 2: Gather Documentation
Collect the missing prescription and supporting clinical documentation required by the payer.

Step 3: Verify Eligibility
Ensure the patient meets coverage criteria and that the service aligns with payer policies.

Step 4: Prepare Appeal Letter
Draft a clear, concise appeal letter addressing the denial reason and attaching all relevant documentation.

Step 5: Submit Within Deadline
File the appeal within the payer’s stated timeframe to avoid forfeiting your right to challenge the denial.

Step 6: Track and Follow Up
Monitor the appeal’s progress and follow up with the payer to ensure timely resolution.

How To Prevent CO-174 Denials

Front-End Prevention

• Implement robust eligibility verification processes to ensure prescriptions are obtained prior to service delivery.
• Educate clinical staff on payer-specific documentation requirements to minimize compliance gaps.

Billing Best Practices

• Validate claims for required documentation before submission.
• Conduct regular audits to identify trends and address recurring errors.

Technology Solutions

• Utilize automated tools like CombineHealth.ai’s Adam to flag potential documentation issues proactively.
• Leverage Rachel (AI Appeals Manager) to streamline the appeals process for faster resolution and improved success rates.

CombineHealth.ai’s platform also offers real-time claim scrubbing and automated eligibility checks to prevent denials, empowering RCM teams to focus on strategic goals rather than manual rework.

FAQs

Q1: What does CO-174 mean in medical billing?
CO-174 indicates a denial due to the absence of a prescription prior to service or equipment delivery.

Q2: Can CO-174 denials be appealed?
Yes, providers can appeal CO-174 denials by submitting the missing prescription and supporting documents within the payer’s deadline.

Q3: How long do I have to appeal?
Appeal timelines vary by payer but are typically outlined in the denial notice.

Q4: How can I prevent these denials?
Implement automated eligibility verification, educate staff on payer requirements, and use tools like CombineHealth.ai’s Adam to proactively identify compliance issues. See our complete guide on denial prevention

By understanding CO-174 denials and adopting best practices for prevention and appeals, healthcare organizations can reduce revenue leakage and enhance operational efficiency while maintaining compliance with payer policies.