CO-118: ESRD Network Support Adjustment
The ESRD network assessment is a contractual write-off. Accept and post as a standard adjustment unless the amount is incorrect.
What Does CO-118 Mean?
CO-118 confirms the ESRD network support assessment is a contractual obligation. The provider agreed to this deduction as part of participating in ESRD care, and the amount cannot be billed to the patient. This is the expected and routine pairing for this code. The adjustment reduces the provider's payment by the network support assessment amount.
CARC 118 appears on remittances for End-Stage Renal Disease (ESRD) services when the payer deducts the ESRD network support assessment from the provider's payment. ESRD Networks are regional organizations established under federal mandate to improve the quality of care for patients with kidney failure. The assessment is a standard reduction applied to dialysis facility and renal service claims to fund these network operations.
This adjustment is not a denial in the traditional sense — it is a predictable, contractual deduction that providers participating in ESRD care should expect on every qualifying claim. The amount is typically a small percentage of the total payment and is consistent across claims for the same service type. Providers who are new to ESRD billing may be surprised by this code, but experienced dialysis facilities account for it in their revenue projections.
The code most commonly appears with Group Code CO, confirming it as a contractual write-off that cannot be billed to the patient. Occasionally it may appear with OA in multi-payer scenarios. While the standard assessment is not appealable, providers should verify the deduction amount matches the current network support rate. If the amount appears incorrect or is applied to services that should not carry the assessment, contact the payer for clarification.
Common Causes
| Cause | Frequency |
|---|---|
| ESRD network support deduction applied to dialysis claims The payer automatically reduces payment to account for the ESRD network support assessment. This is a standard reduction applied to ESRD-related services and is not a billing error. | Most Common |
| Incomplete ESRD-specific documentation Missing or incomplete documentation related to ESRD network support, including lack of required patient records or certifications specific to renal disease treatment. | Common |
| Coding errors on renal service claims Incorrect CPT or HCPCS codes or missing modifiers specific to ESRD services caused the adjustment to be applied incorrectly or flagged for review. | Common |
| Policy or reimbursement changes The provider was not compliant with updated reimbursement policies or ESRD network support assessment rules, leading to unexpected adjustments. | Occasional |
How to Resolve
Verify the ESRD network support assessment amount is correct, then write off as a standard contractual adjustment.
- Verify the assessment rate Compare the deducted amount against the current ESRD network support rate to confirm accuracy.
- Post as contractual adjustment Write off the assessment as a standard contractual deduction in your practice management system.
- Request correction if amount is wrong If the amount does not match the expected rate, contact the payer to request reprocessing with documentation of the correct assessment.
This is a standard contractual adjustment. The amount is a provider write-off per your payer contract and cannot be billed to the patient.
Common RARC Pairings
The RARC code tells you exactly what triggered the CO-118:
| RARC | Description |
|---|---|
| N130 | Alert: You may need to review the plan documents or payer guidelines to understand the ESRD network assessment Review ESRD network assessment policies → |
How to Prevent CO-118
- Account for the ESRD network support assessment in revenue projections for all ESRD service lines
- Stay informed about changes to the ESRD network support assessment rate through CMS communications and payer updates
- Ensure all ESRD services are coded correctly to avoid incorrect assessment applications
- Conduct regular reconciliation of ESRD payment adjustments to catch any discrepancies early
General Prevention
- Maintain complete and accurate documentation for all ESRD services including patient certifications and treatment records
- Verify patient ESRD eligibility and coverage before rendering services
- Follow proper coding guidelines specific to ESRD services and ensure correct modifiers are applied
- Stay informed about ESRD network support assessment rate changes and payer policy updates
- Conduct regular audits of ESRD billing to identify and correct recurring issues
Also Filed As
The same CARC 118 may appear with different Group Codes:
Related Denial Codes
Sources
- https://www.mdclarity.com/denial-code/118
- https://practiceperfectss.com/list-of-denial-codes-in-medical-billing/
- Codes maintained by X12. Visit x12.org for official definitions.