How to fix a CO-97 denial
Find the edit, read the notes, and add a modifier only when they support it.
CO-97 means the payer counts this service as part of another one it has already paid, so the line pays nothing. Find the edit behind it, then correct the claim if a modifier was missed, appeal if the notes show a separate service, or write it off.
- Group code
- CO, contractual obligation
- Who pays
- Not the patient
- Usual fix
- Check the edit, then the notes
- Appeal or correct
- Correct if miscoded, else appeal
What CO-97 means
CO-97 is a bundling denial. The payer has decided that this service is already paid for as part of another service for the same patient, so this line gets no separate payment. The official X12 description of reason code 97 is "The benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated."
The other service may be on the same claim or on one already processed, such as a surgery whose global period covers the visit. The remark code next to CO-97 tells you which kind of bundling applied:
- M80: not covered in the same session or on the same date as a service already processed
- M15: separately billed services bundled as parts of the same procedure
- N390: this service or report can’t be billed separately
- N19 or N20: incidental to the main procedure, or not payable with another service that day
- M144: pre- and post-operative care is included in the surgery’s allowance
X12 also has reason code 236 for a code pair the National Correct Coding Initiative (NCCI) treats as incompatible on the same day; work it the same way. Our denial code reference covers the other codes on a remittance.
What CO means on a bundling denial
CO is the Contractual Obligation group. CMS’s remittance manual says CO adjustments come from a contract or a regulation and are generally a write-off for the provider, not billed to the patient. On the books a CO-97 write-off can look like a CO-45, but CO-45 trims a paid line to the allowed amount, while CO-97 pays the line nothing.
For Medicare the rule is firmer. The NCCI policy manual says services denied under NCCI procedure-to-procedure (PTP) edits may not be billed to Medicare patients, and an Advance Beneficiary Notice can’t shift the cost to them, because the denial is about coding, not medical necessity. State Medicaid programs apply their own NCCI edits, and commercial plans publish their own bundling policies.
Common CO-97 causes and how to fix each one
Start with the code pair, then the notes. The fix depends on whether the services were truly separate and documented that way.
- NCCI edit with modifier indicator 0Don’t bill the pair together for the same provider, patient and day. Only the column one code can be paid; write off the other.
- NCCI edit with modifier indicator 1, no modifierIf the notes show a separate site, session, encounter or practitioner, add XS, XE, XP or XU (or 59 if none fits) and resubmit.
- Modifier 59 or X used without supportNothing to fix: the edit worked. Write it off and show the coder what the notes would have needed.
- Visit on the same day as a minor procedureBill the visit only when it was significant and separately identifiable, with modifier 25 and notes to match.
- Visit inside a surgery’s global period (M144)Related follow-up is included. An unrelated visit needs modifier 24 and a diagnosis that shows it is unrelated.
- Visit that led to the decision for major surgeryOn the day of or the day before surgery, bill it with modifier 57, not 25.
- Commercial payer bundling ruleCheck the payer’s published policy for the code pair, and appeal with the notes and that policy when they support payment.
How to work a CO-97, step by step
Find the other service
Use the remark code and the patient’s claim history to find the service this line was bundled into.
Look up the edit
For Medicare and Medicaid, the NCCI PTP table and its modifier indicator. For commercial plans, the payer’s bundling policy.
Read the notes
Do they show a separate site, session, encounter or practitioner, or a significant, separate visit?
Correct or appeal
A missing or wrong modifier is a correction. A correctly coded claim the payer still bundles is an appeal, sent with the notes.
Write off what the notes don’t support
Post it as a contractual adjustment and do not bill the patient.
Feed it back to coding
Share the code pair and the fix with the coder, so the next claim goes out right.
Medicare: reopening or redetermination
Medicare splits corrections from appeals. Chapter 34 of the Claims Processing Manual treats clerical errors, including an incorrect modifier, as reopenings, not appeals. Part B contractors must offer telephone reopenings, and you can ask for a reopening for any reason within one year of the initial determination. The MAC decides what counts as clerical and may ask for records, and a reopening request does not pause your appeal deadline.
If the claim was coded correctly and you disagree with the bundling, ask for a redetermination, the first level of appeal, within 120 days of receiving the initial determination. The notice is presumed received five days after its date. Send the notes that show the services were separate. Appeals go to your MAC: the NCCI program does not take claim appeals.
With other payers, a missing modifier usually goes back as a corrected claim, frequency code 7 with the original claim number, unless the payer’s manual says otherwise.
How to prevent CO-97 upstream
Bundling denials start with code choice and the note, so prevention sits with coding and documentation:
- Check code pairs against the current NCCI PTP edits before the claim goes out; CMS updates the files every quarter
- Use XE, XS, XP or XU instead of 59 whenever one fits, as CMS asks
- Write notes that name the separate site, session or problem when two services share a day
- Have certified medical coders review procedure days and global-period visits before billing
- Track CO-97 by code pair and provider each month as part of denial management, and retrain where one pair keeps coming back
Remark codes N822 and N823 flag a missing or invalid modifier. On a CO-16 they mean a data fix, not a bundling dispute.
The payer says the service is included in the payment for another service it has already processed, so this line pays nothing on its own. It is a bundling denial. CO means a contractual obligation: the amount is the provider’s write-off, not the patient’s bill, unless the claim is corrected or appealed and paid. The remark code, such as M80, M15 or N390, shows what kind of bundling applied.
No. CO adjustments are generally the provider’s write-off. For Medicare, the NCCI policy manual says services denied under NCCI code-pair edits may not be billed to the patient, and an Advance Beneficiary Notice does not change that, because the denial is about coding rather than medical necessity. For commercial plans, read the hold-harmless terms in your contract before billing any member.
Only if the notes support it. CMS says modifiers 59, XE, XP, XS and XU must not be used to get around an NCCI edit unless the criteria are met and the documentation shows a distinct service: a different site, session, encounter or practitioner. Use the most specific X modifier that fits, and 59 only when none does. Modifier 59 never goes on an E/M visit; that is what modifier 25 is for.
M80 says the service is not covered when performed in the same session or on the same date as a service already processed for the patient. Paired with CO-97, it points to a same-day bundling edit. Look up the code pair, check its modifier indicator, and read the notes before you decide whether to correct the claim, appeal it or write it off.
It depends on what went wrong. A missing or wrong modifier on a service the notes support is a correction: a corrected claim for most payers, or a reopening for Medicare, which treats a modifier error as clerical. If the claim was right and the payer still bundled it, appeal with the notes. For Medicare, that is a redetermination within 120 days of receiving the remittance.
Medicare’s global surgery package includes related follow-up visits in the surgery’s payment: through day 10 after minor procedures with a 10-day period, and through day 90 after major surgery, which also covers the day before. A visit for an unrelated problem can be billed with modifier 24 and a diagnosis that shows it is unrelated. A visit that led to the decision for major surgery takes modifier 57.
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