CO-97 Denials Explained: How to Identify, Appeal, and Prevent Them

Denial codes are a common hurdle for healthcare revenue cycle management (RCM) teams, and CO-97 is among the most frequent. This code indicates that the billed service is considered part of another service already reimbursed, creating confusion and delays in payment. Addressing CO-97 denials promptly is crucial to avoid revenue loss and operational inefficiencies.

In this article, we’ll break down what CO-97 denials mean, how to differentiate them from similar codes, and actionable steps for appealing and preventing them.

What Is a CO-97 Denial?

The CO-97 denial code indicates that the payer has determined the billed service is bundled into another service or procedure that has already been reimbursed. The prefix "CO" stands for "Contractual Obligation," meaning the provider is financially responsible for the adjustment and cannot bill the patient for the denied amount.

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In the case of CO-97, the provider must resolve the denial without transferring financial responsibility to the patient.

Comparison: CO-97 vs Similar Denial Codes

Denial CodePrefix MeaningReason/DescriptionWho's Financially ResponsibleCO-97Contractual ObligationThe benefit for this service is included in the payment/allowance for another service/procedureProviderCO-45Contractual ObligationCharges exceed the contracted fee schedule/maximum allowable amountProviderPR-119Patient ResponsibilityBenefit maximum for this time period or occurrence has been reachedPatient

While CO-97 focuses on bundled services, CO-45 relates to exceeding fee schedules, and PR-119 pertains to patient benefit limits. Understanding these distinctions helps providers address denials more effectively.

Common Causes of CO-97 Denials

Impact on Revenue Cycle Teams

CO-97 denials create significant financial and operational challenges for healthcare organizations:

Financial Impact:

Operational Impact:

Leveraging tools like CombineHealth.ai’s Adam (AI Denial Manager) reduces these impacts by automating denial identification, tracking, and resolution, saving time and improving cash flow.

Steps To Appeal a CO-97 Denial

Carefully examine the explanation of benefits (EOB) or remittance advice (RA) to confirm the reason for the denial.

Collect all relevant clinical notes, claim forms, and supporting documents to justify the billed service.

Ensure the service is covered under the patient’s plan and that the coding aligns with payer policies.

Draft a detailed appeal letter, including:

- Patient and claim information

- Explanation of why the service should be reimbursed

- Supporting documentation and references to coding guidelines

Appeals must be submitted before the payer’s deadline, which typically ranges from 30 to 180 days.

Monitor the status of the appeal and follow up with the payer regularly to ensure timely resolution.

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How To Prevent CO-97 Denials

Front-End Prevention

Billing Best Practices

Technology Solutions

CombineHealth.ai’s Rachel (AI Appeals Manager) streamlines denial appeals, reducing turnaround times and improving success rates. Adam (AI Denial Manager) proactively identifies potential denials, helping prevent them altogether.

FAQs

CO-97 indicates that the billed service is included in the payment for another service and cannot be separately reimbursed.

Yes, CO-97 denials can be appealed with proper documentation and an explanation of why separate reimbursement is justified.

Appeal deadlines vary by payer but typically range from 30 to 180 days. Check the denial notice for specific timelines.

By understanding CO-97 denials and implementing proactive strategies, RCM teams can reduce revenue leakage, improve operational efficiency, and maintain financial health.