CO-112: Service Not Furnished Directly or Not Documented

What Does CO-112 Mean?

With CO (Contractual Obligation), the CARC 112 adjustment is the provider's responsibility. The payer denied or reduced payment because of the billing provider did not directly furnish the service, and the arrangement does not qualify under incident-to, shared visit, or other accepted billing arrangements. The patient is not liable for this amount. If the denial is in error, the provider can correct and resubmit the claim or file an appeal with supporting documentation.

CARC 112 is used when the payer determines that service not furnished directly or not documented. The claim could not be processed as submitted because required information was absent, incomplete, or did not meet the payer's submission standards.

Common scenarios that trigger this adjustment include: the billing provider did not directly furnish the service, and the arrangement does not qualify under incident-to, shared visit, or other accepted billing arrangements; The medical record does not contain adequate documentation to support that the billed service was actually performed; The service was billed incident-to a physician's services, but the incident-to requirements (direct supervision, initiated by the physician, etc.) were not met. The group code paired with CARC 112 determines who bears the financial responsibility — CO places it on the provider as a contractual obligation, PR shifts it to the patient, OA indicates a coordination of benefits or other payer adjustment.

Common Causes

How to Resolve

1. Review the remittance details Examine the CO-112 adjustment and any accompanying RARC codes to identify the specific reason for the denial.
2. Identify the root cause Determine which issue applies: service billed by provider who did not render it, missing or insufficient documentation of service delivery, incident-to billing requirements not met, among others.
3. Correct the claim Address the identified issue — update the claim data in your billing system to resolve the service not furnished directly or not documented problem.
4. Resubmit the corrected claim Submit the corrected claim following the payer's resubmission guidelines. Include any supporting documentation that addresses the denial reason.
5. Appeal if the original claim was correct Appeal with complete medical record documentation showing the service was furnished. Include physician notes, procedure documentation, clinical staff attestations, and evidence of the billing arrangement (incident-to documentation, locum tenens modifier). For audit-related denials, provide the full medical record for the date of service.

Common RARC Pairings

The RARC code tells you exactly what triggered the CO-112:

How to Prevent CO-112

• Ensure all services are documented in the medical record at the time they are rendered
• Train providers on documentation requirements that support billing for services furnished
• Implement incident-to billing compliance checks before claim submission
• Use proper modifiers for locum tenens and substitute provider arrangements
• Conduct regular internal audits comparing billed services to medical record documentation
• Ensure all clinicians understand which services they can bill directly versus under incident-to rules

Also Filed As

The same CARC 112 may appear with different Group Codes:

Related Denial Codes