CO-293 Denials Explained: How to Identify, Appeal, and Prevent Them

Denial codes are an inevitable part of the healthcare revenue cycle, but understanding and managing them effectively can significantly reduce their financial and operational impact. Among these, CO-293 denials are particularly challenging as they involve services not covered under a patient's current benefit plan. For revenue cycle management (RCM) teams, addressing these denials is critical to maintaining cash flow and minimizing revenue loss.

In this blog, we’ll break down the CO-293 denial code, explore its causes, discuss strategies for appealing it, and provide actionable tips to prevent these denials from occurring in the first place.

What Is a CO-293 Denial?

CO-293 is a contractual obligation denial code indicating that a service or procedure is not covered under the patient's current benefit plan due to a contractual exclusion. The prefix "CO" stands for "Contractual Obligation," meaning the financial responsibility does not fall on the patient but is instead attributed to the provider or payer. This type of denial often requires providers to appeal or write off the denied amount, depending on the circumstances.

The denial notice will typically reference the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), which provides more details on the policy exclusion.

Comparison: CO-293 vs Similar Denial Codes

Denial Code	Prefix Meaning	Reason/Description	Who's Financially Responsible
CO-293	Contractual Obligation	Service/procedure not covered under the patient’s current benefit plan.	Provider
PR-96	Patient Responsibility	Non-covered charge due to benefit limitations or exclusions.	Patient
OA-18	Other Adjustment	Exact duplicate claim/service already processed.	Payer

While CO-293 and PR-96 both involve non-covered services, PR-96 denotes patient responsibility, whereas CO-293 is the provider's contractual obligation. OA-18, on the other hand, relates to duplicate claims rather than benefit exclusions.

Common Causes of CO-293 Denials

1. Benefit Plan Limitations: The service falls outside the scope of the patient’s insurance coverage, often due to plan-specific exclusions.
2. Policy Exclusions: Certain procedures or treatments explicitly excluded by the payer contract.
3. Incorrect Eligibility Verification: Failure to verify the patient’s benefits and coverage before rendering services.
4. Outdated Contract Information: Using incorrect or outdated payer contract terms while submitting claims.

Impact on Revenue Cycle Teams

CO-293 denials create significant challenges for RCM teams, both financially and operationally:

Financial Impact:
- Revenue loss from denied claims that require additional effort to resolve.
- Increased accounts receivable (AR) days due to prolonged denial resolution.
- Write-offs in cases where appeals are unsuccessful or deadlines are missed.
- Higher operational expenses tied to denial management efforts.

Operational Impact:
- Increased workload on denial management staff, diverting resources from other critical tasks.
- The need for in-depth knowledge of payer policies and clinical requirements.
- Coordination challenges between billing, coding, and clinical teams to address denials.
- The necessity of monitoring denial trends and analyzing root causes for process improvement.

To mitigate these impacts, organizations can leverage CombineHealth.ai’s technology solutions. Adam, the AI Denial Manager, enables RCM teams to identify, track, and resolve CO-293 denials efficiently, reducing revenue leakage and improving overall cash flow.

Steps To Appeal a CO-293 Denial

Follow these steps to appeal CO-293 denials effectively:

Step 1: Review the Denial Notice
Carefully examine the denial explanation, including the 835 Healthcare Policy Identification Segment, for details on why the service was denied.

Step 2: Gather Documentation
Collect all necessary documentation, including the patient’s insurance policy details, medical records, and supporting evidence for the claim.

Step 3: Verify Eligibility
Confirm the patient’s eligibility and coverage at the time of service to identify any discrepancies or errors.

Step 4: Prepare Appeal Letter
Draft a detailed appeal letter that includes the claim information, reasons for the appeal, and supporting documentation. Highlight any errors or omissions in the denial reasoning.

Step 5: Submit Within Deadline
Ensure the appeal is submitted within the payer’s specified timeframe to avoid automatic rejection.

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

How To Prevent CO-293 Denials

Front-End Prevention

• Comprehensive Eligibility Verification: Verify the patient’s benefits and coverage prior to scheduling or rendering services.
• Pre-Authorization Process: Obtain necessary pre-authorizations for services that may not be covered.

Billing Best Practices

• Accurate Coding and Documentation: Ensure claims are coded correctly and supported by adequate clinical documentation.
• Contractual Awareness: Train staff to understand payer contracts and identify potential exclusions before submitting claims.

Technology Solutions

• Eligibility Verification Tools: Use automated tools like CombineHealth.ai’s platform to verify coverage in real-time.
• AI-Powered Claim Scrubbing: Implement Adam to identify potential denial risks and flag claims for review before submission.

CombineHealth.ai’s comprehensive platform offers automated solutions for eligibility verification, claim scrubbing, and denial tracking. When denials do occur, Rachel, the AI Appeals Manager, streamlines the appeal process, improving success rates and reducing turnaround times.

FAQs

Q1: What does CO-293 mean in medical billing?
CO-293 indicates that a service or procedure is not covered under the patient’s benefit plan due to a contractual exclusion.

Q2: Can CO-293 denials be appealed?
Yes, CO-293 denials can be appealed by providing proper documentation and evidence to support the claim.

Q3: How long do I have to appeal?
The timeframe for appeals varies by payer but is typically between 30 and 90 days. Check the payer’s specific guidelines for deadlines.

Q4: How can I prevent these denials?
Proactive eligibility verification, pre-authorization, accurate coding, and leveraging technology like CombineHealth.ai can significantly reduce CO-293 denials. See our complete guide on denial prevention.