CO 45 Denial Code: Avoiding Denials
Basics of CO 45
Denial code CO 45: Charges exceed your contracted/legislated fee arrangement. Kindly note this adjustment amount cannot equal the total service or claim charge amount; and must not duplicate provider adjustment amounts (payments and contractual reductions) that have resulted from prior payer(s) adjudication.
What is a Denial Code?
Denial reason codes are standard messages, which are used to describe or provide information to the medical provider or patient by insurance companies regarding why the claims were denied. This standard format is followed by all the insurance companies in order to relieve the burden of the medical provider.
Generally Denial code CO 45 comes in a paid claim. That means claims processed and allowed some amount, due to contract with Insurance we are not supposed to bill patients other than the allowed amount. This amount is usually write off amount that what refers by CO 45.
If you sent out a charge for a $100 dollars and the insurance contract only covered the service for $80, they may pay the claim and return code of CO-45 (Charge Exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement). In this case, you got paid, and the payer is simply telling you what portion of the bill was not allowed according to your insurance contract.
What is PR 42?
PR42 with the amount that is the difference between the allowed amount and the limiting charge for which the beneficiary is liable; if excess payment made by the beneficiary. Common reasons for a message: Item or service paid Medicare allowed amount; Item or service paid to patient’s deductible and/or coinsurance; or Item or services paid with the partial unit.
What is a Claim Adjustment Group Code?
A Claim Adjustment Group Code consists of two alpha characters that assign the responsibility of a Claim Adjustment on the insurance Explanation of Benefits.
These 5 EOB Claim Adjustment Group Codes are:
- CO: Contractual Obligation
- CR: Corrections and Reversal
- OA: Other Adjustment
- PI: Payer Initiated Reductions
- PR: Patient Responsibility
These Group Codes are combined with Claim Adjustment Reason Codes that can be numeric or alpha-numeric, ranging from 1 to W2. Claim Adjustment Reason Codes are associated with an adjustment, meaning that they must communicate why a claim or service line was paid differently than it was billed. If there is no adjustment to a claim/line, then there is no adjustment reason code. Examples of EOB Claim Adjustments are:
- CO-45: Indicates claim amount that must be written off based on payer contracted fee schedule.
- CO-97: Indicates the benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated.
- OA-23: Indicates the impact of prior payer(s) adjudication including payments and/or adjustments.
- PR-1: Indicates amount applied to patient deductible.
- PR-2: Indicates amount applied to patient co-insurance.
Researching and resubmitting claims with common denial codes like CO 16 denial code can lead to long, frustrating hours trying to figure out why the claim was denied in the first place. The good news is that on average, 63% of denied claims are recoverable and nearly 90% are preventable. E2E Medical Billing Services can assist you in addressing these denials and recover the insurance reimbursement. For more information, feel free to call us at 888-552-1290 or write to us at info@e2eMedicalBilling.com