A CO-97 denial code can be confusing when it first appears on a healthcare claim. The claim may have been submitted correctly, but the payer says the service is already included in the payment for another service or procedure.
In simple terms, the payer is saying, “We’re not paying this service separately.”
The official Claim Adjustment Reason Code (CARC) 97 means that the benefit for the service is included in the payment or allowance for another service or procedure that has already been adjudicated.
CO-97 denials are commonly associated with bundled services, coding combinations, payer-specific payment policies, or services that are considered part of another procedure.
The good news is that a CO-97 denial isn’t always the end of the claim. Once you understand why the payer applied it, you can determine whether the service was correctly bundled, whether the claim needs a correction, or whether an appeal is appropriate.
What Does CO-97 Mean?
CO-97 consists of two parts:
CO: Contractual Obligation
97: Payment for the service is included in the allowance for another service or procedure.
CMS explains that the CO group code assigns financial responsibility to the provider for the unpaid portion of the claim.
The “97” portion identifies the reason for the adjustment.
For example, suppose a provider bills two services performed during the same encounter. The payer may determine that one service is already included in the reimbursement for the primary procedure.
Instead of paying both services separately, the payer bundles them together and applies CO-97 to the additional service.
CMS has specifically used CO-97 for services that are bundled into another payable service.
CO-97 at a Glance
| Item | Meaning |
| Denial Code | CO-97 |
| Group Code | CO |
| Reason Code | 97 |
| Type | Claim Adjustment Reason Code |
| Basic Meaning | Service is included in payment for another service or procedure |
| Common Cause | Bundling or payer payment policy |
| Provider Responsibility | Usually provider contractual obligation |
| Next Step | Review claim, coding, payer policy, and related services |
Why Do CO-97 Denials Happen?
There isn’t just one reason for a CO-97 denial.
Bundled Services
This is one of the most common causes.
Some procedures are designed to be billed together, with payment for the related service included in the primary procedure.
CMS uses National Correct Coding Initiative (NCCI) methodologies to identify certain code combinations that should not be separately reported under specific circumstances. CMS also notes that private insurers may choose to adopt NCCI methodologies.
Incorrect Modifier Use
A modifier may sometimes be necessary to show that two services were separately identifiable.
If the appropriate modifier isn’t reported, the payer may consider the services part of the same procedure and apply CO-97.
However, a modifier should never be added simply to force payment. The documentation and payer rules need to support separate reporting.
Duplicate or Overlapping Services
A payer may determine that a service overlaps with another service already processed for the same patient, provider, date, or encounter.
The claim may therefore be adjusted because the payer considers the service already included.
Payer-Specific Billing Rules
Not every payer handles every code combination in exactly the same way.
Medicare, Medicaid programs, and commercial insurers may have different reimbursement policies. A claim that is paid separately by one payer may be bundled by another.
That’s why the payer’s specific policy should be checked before correcting or appealing a CO-97 denial.
Incorrect Code Combination
Sometimes the issue is simply that the submitted CPT or HCPCS codes don’t accurately represent the services performed.
If the codes create a bundling conflict, the payer may process one service and deny the other with CO-97.
How to Fix a CO-97 Denial
The first mistake to avoid is immediately resubmitting the same claim.
If nothing changes, the same denial may happen again.
Instead, follow a structured review.
Step 1: Review the ERA or EOB
Start with the electronic remittance advice (ERA) or explanation of benefits (EOB).
Look at the specific claim line that received CO-97. Check the CPT or HCPCS code, units, modifiers, date of service, and any accompanying Remark Code.
CMS explains that remittance advice uses group codes, CARCs, and RARCs to communicate why a claim or claim line was adjusted.
The RARC can provide additional information about why the payer applied the adjustment.
Step 2: Identify the Other Service
CO-97 specifically indicates that the denied service is included in another service or procedure.
Find the other code that the payer considered the primary or payable service.
Ask:
- Which service was paid?
- Which service received CO-97?
- Were both services performed on the same date?
- Were they reported by the same provider?
- Does the payer consider them bundled?
This often reveals the reason behind the denial.
Step 3: Check Coding and NCCI Edits
Review the applicable coding guidelines and NCCI edits.
CMS updates NCCI edit files regularly, with updates generally occurring at least quarterly.
If the two codes are subject to a bundling edit, determine whether the services were appropriately reported.
Step 4: Review Documentation
Documentation matters when deciding whether two services should be reported separately.
Review the patient’s medical record, operative report, procedure note, or other relevant documentation.
If the documentation does not support separate services, an appeal may not be appropriate.
If the record clearly supports separately identifiable services and the payer’s policy allows separate reimbursement, there may be grounds for correction or appeal.
Step 5: Check Modifier Requirements
If the services were genuinely separate and the payer allows them to be reported separately, determine whether a modifier was required.
For example, modifier 59 or an applicable X{EPSU} modifier may be appropriate in certain circumstances.
Don’t use a modifier simply because CO-97 appeared. The medical documentation and coding rules need to support its use.
Step 6: Correct or Appeal the Claim
After reviewing the denial, decide which action makes sense.
If the claim was coded incorrectly: Submit a corrected claim according to payer instructions.
If the service was properly bundled: Accept the adjustment and don’t rebill it as a separate service.
If the service was separately reportable and documentation supports it: Submit an appeal with the necessary documentation and explanation.
Can You Appeal a CO-97 Denial?
Yes, a CO-97 denial can sometimes be appealed, but not every CO-97 denial should be appealed.
An appeal makes sense when the provider can demonstrate that the service was separately reportable under the applicable coding and payer rules.
The appeal should explain why the service should not have been bundled and include supporting documentation where appropriate.
Before submitting the appeal, check the payer’s specific requirements and filing deadline.
If the payer’s policy clearly states that the service is included in another procedure, repeatedly appealing the same denial is unlikely to solve the problem.
How to Prevent CO-97 Denials
The best way to handle CO-97 is to prevent avoidable cases before the claim reaches the payer.
A strong revenue cycle process can help identify potential bundling issues during claim review.
Use Claim Scrubbing
Claim-scrubbing software can flag certain code combinations and billing issues before submission.
This gives the billing team an opportunity to review the claim instead of waiting for a payer response.
Review NCCI Edits
NCCI edits should be reviewed as part of the coding and billing process when applicable.
Because CMS updates NCCI files regularly, billing teams should work from current edit information rather than relying on an old reference.
Train Coders and Billers
Coding teams should understand common bundling rules, modifier requirements, and payer-specific policies.
Regular training can help reduce repeated errors.
Track CO-97 by Payer and Code
Don’t treat every denial as an isolated event.
Track CO-97 denials by:
- Payer
- CPT or HCPCS code
- Provider
- Specialty
- Date of service
- Denial frequency
- Dollar value
If one payer repeatedly applies CO-97 to the same code combination, that pattern deserves investigation.
CO-97 vs Other Common Denial Codes
CO-97 is often confused with other claim adjustment codes.
| Code | General Meaning |
| CO-97 | Service is included in payment for another service or procedure |
| CO-16 | Claim lacks information needed for adjudication |
| CO-18 | Duplicate claim or service |
| CO-29 | Claim submitted after the filing deadline |
| CO-50 | Service doesn’t meet medical necessity requirements |
The exact resolution depends on the complete remittance advice, including any associated remark codes and payer-specific information.
How Revenue Cycle Management Can Help
CO-97 denials are not only a coding issue. Repeated denials can point to a larger revenue cycle problem.
An effective RCM team can monitor denial trends, review claim edits before submission, identify payer patterns, and determine whether a correction or appeal is appropriate.
For healthcare practices with high claim volume, automated claim scrubbing and denial analytics can make this process more manageable.
Instead of discovering the same problem after payment has already been denied, the practice can identify recurring issues earlier.
That can help reduce unnecessary rework and keep claims moving through the revenue cycle.
Frequently Asked Questions
Is CO-97 a patient responsibility?
Generally, the CO group code indicates a contractual obligation assigned to the provider, not the patient. CMS explains that CO assigns responsibility for the unpaid portion to the provider.
However, always review the complete remittance advice before transferring any balance to a patient.
Does CO-97 mean the claim was completely denied?
Not necessarily.
CO-97 may apply to one claim line while another service on the same claim is paid. The denial means the particular service wasn’t separately reimbursed because the payer considered it included in another service.
Can CO-97 be corrected with a modifier?
Sometimes, but only when the modifier is supported by the circumstances and applicable coding and payer rules.
A modifier should not be added simply to bypass a bundling edit.
Should I resubmit a CO-97 claim?
Not automatically.
First determine why the payer bundled the service. If the original claim was correct and the service is genuinely included in another procedure, resubmitting the same claim will likely produce the same result.
How can CO-97 denials be reduced?
Start by identifying the codes and payers generating the most CO-97 adjustments. Then review NCCI edits, payer policies, documentation, modifier use, and claim-scrubbing rules.
Final Thoughts
The CO-97 denial code doesn’t always mean something went wrong with the patient’s care or that the provider can’t be paid.
In many cases, it simply means the payer considers one service to be part of another service that has already been reimbursed.
The key is understanding why the payer applied the adjustment.
Review the ERA or EOB, identify the related service, check the applicable coding and payer rules, review the documentation, and then decide whether the claim should be corrected, appealed, or accepted as bundled.
For practices dealing with recurring CO-97 denials, the bigger opportunity is often prevention. Better claim scrubbing, current coding knowledge, denial tracking, and payer-specific analysis can help identify problems before they become repeated revenue cycle issues.
When CO-97 is treated as a pattern to analyze rather than just another denial to close, billing teams can make better decisions and protect more of the revenue the practice has earned.
