CO-198 Denials Explained: How to Identify, Appeal, and Prevent Them

CO-198 denials are a frequent challenge for healthcare revenue cycle teams, representing a claim rejection due to exceeding precertification or authorization limits. These denials can lead to lost revenue, delayed payments, and operational inefficiencies if not addressed promptly. Understanding the details of CO-198 denials, how to appeal them, and implementing prevention strategies is critical for maintaining cash flow and ensuring claims are processed correctly.

This article will help you understand what CO-198 denials mean, their causes, how to appeal them, and proactive strategies to avoid them entirely.

What Is a CO-198 Denial?

A CO-198 denial occurs when a claim is rejected because the services provided exceeded the authorized amount, units, or visits outlined in the precertification. The prefix "CO" indicates contractual obligation, meaning the payer is financially responsible for denying the claim based on their policy rules. In this case, the provider is typically responsible for resolving the issue and appealing the denial.

Understanding prefixes is vital for interpreting denial codes:
- CO (Contractual Obligation): The payer is responsible for the denial.
- PR (Patient Responsibility): The patient is responsible for the balance.
- OA (Other Adjustment): Other factors, such as payer-specific adjustments, are involved.

Comparison: CO-198 vs Similar Denial Codes

Denial Code	Prefix Meaning	Reason/Description	Who's Financially Responsible
CO-198	Contractual Obligation	Precertification/authorization exceeded	Provider
CO-197	Contractual Obligation	Authorization not obtained	Provider
CO-151	Contractual Obligation	Payment adjusted due to payer policies	Provider

CO-198 differs from similar codes like CO-197, which occurs when no authorization was obtained, while CO-151 relates to general payer policy adjustments not tied to precertification limits. Identifying the specific denial code helps ensure accurate resolution steps.

Common Causes of CO-198 Denials

1. Authorization Limits Exceeded: Services provided exceeded the number of visits, units, or dollar amount approved by the payer.
2. Incomplete Precertification Details: Errors or omissions in the authorization request lead to a mismatch during claim processing.
3. Failure to Verify Coverage: Lack of upfront eligibility verification results in unapproved services being rendered.
4. Lack of Communication Between Teams: Poor coordination between clinical, billing, and coding teams can lead to discrepancies in the claim submission process.

Impact on Revenue Cycle Teams

CO-198 denials pose financial and operational challenges that can disrupt the efficiency of healthcare revenue cycle management.

Financial Impact:
- Revenue loss from unprocessed claims and potential write-offs.
- Increased accounts receivable (AR) days, affecting cash flow.
- Higher costs due to the manual rework required to resolve denials.

Operational Impact:
- Staff time diverted to address complex denials instead of focusing on other RCM priorities.
- Need for specialized knowledge of payer requirements and clinical documentation.
- Increased collaboration between departments to prevent and resolve denials.
- Monitoring denial trends for actionable insights.

To overcome these challenges, RCM teams can leverage technologies like CombineHealth.ai’s Adam, the AI Denial Manager, to streamline the identification and resolution of CO-198 denials, reducing revenue leakage and improving operational efficiency.

Steps To Appeal a CO-198 Denial

Step 1: Review the Denial Notice
Carefully review the explanation of benefits (EOB) or electronic remittance advice (ERA) for details about the denial reason.

Step 2: Gather Documentation
Collect all supporting documents, including the original authorization, clinical notes, and service records, to validate the claim.

Step 3: Verify Eligibility
Ensure that the services provided match the details outlined in the precertification, including approved units and visit limits.

Step 4: Prepare the Appeal Letter
Draft a clear appeal letter that includes the authorization reference number, patient details, claim information, and supporting evidence.

Step 5: Submit Within Deadline
Adhere to the payer’s appeal submission timeline to avoid forfeiting the opportunity for reconsideration.

Step 6: Track and Follow Up
Monitor the appeal status closely and follow up with the payer if necessary to ensure timely resolution.

How To Prevent CO-198 Denials

Front-End Prevention

• Implement robust eligibility verification processes to confirm authorization details before services are rendered.
• Train staff on payer-specific requirements to ensure compliance during authorization requests.

Billing Best Practices

• Validate claims for accuracy and adherence to payer policies before submission.
• Ensure clinical documentation aligns with authorized services to avoid discrepancies.

Technology Solutions

• Use CombineHealth.ai’s automated eligibility verification tools to identify potential authorization issues upfront.
• Leverage Rachel, the AI Appeals Manager, to streamline the appeals process, improving success rates and reducing turnaround time.

By automating denial management and leveraging AI-driven tools, RCM teams can proactively prevent CO-198 denials and optimize claims processing workflows.

FAQs

Q1: What does CO-198 mean in medical billing?
CO-198 refers to a denial code indicating that services exceeded the authorized limits outlined in the precertification.

Q2: Can CO-198 denials be appealed?
Yes, CO-198 denials can be appealed by providing supporting documentation and evidence that the services were authorized.

Q3: How long do I have to appeal?
Appeals deadlines vary by payer but are typically outlined in the EOB or ERA. Submit appeals promptly to avoid missing the timeline.

Q4: How can I prevent these denials?
Proactive authorization verification, staff training, and leveraging AI tools like CombineHealth.ai’s Adam can help prevent CO-198 denials. See our complete guide on denial prevention.