CO-171: Payment Denied — Provider Type in This Facility Type

What Does CO-171 Mean?

CO-171 is the primary pairing for this code and indicates a contractual write-off. The payer has determined that the provider type is not eligible to bill the service in the specified facility type, and the provider must absorb the loss. You cannot bill the patient for the CO-171 amount. The most productive first step is verifying the place of service code, since an incorrect POS is a frequent and easily correctable cause. If the POS is correct, you need to determine whether the claim can be rebilled under an eligible provider or facility combination.

When CARC 171 appears on a remittance, the payer is denying the claim because the specific combination of the provider type who performed the service and the facility type where it was performed is not eligible for reimbursement. This is distinct from CARC 170 (which flags the provider type alone) — CARC 171 specifically addresses the intersection of who performed the service and where it was performed.

Payers maintain rules about which provider types can bill specific services in specific facility settings. A service that a provider is authorized to perform in a hospital may not be reimbursable when the same provider performs it in an office or outpatient clinic. Similarly, a mid-level provider may be eligible to bill a service in a physician office (under incident-to rules) but not in a hospital outpatient department. The denial reflects the payer's determination that this particular provider-facility combination falls outside their reimbursement rules.

One of the most common and easily correctable causes of CARC 171 is an incorrect place of service (POS) code on the claim. If the POS code does not accurately reflect where the service was actually rendered, the payer's system may see a mismatch that does not actually exist. Before pursuing more complex solutions, always verify the POS code matches the actual facility. The RARC pairings are particularly informative with this code: N428 ('Not covered when performed in this place of service') points to a facility issue, while N95 ('This provider type may not bill this service') points to a provider issue, and both together confirm the dual-factor denial.

Common Causes

How to Resolve

Verify the place of service code, confirm provider-facility eligibility with the payer, and either correct the billing or rebill under an eligible provider-facility combination.

1. Verify the place of service code Confirm the POS code matches the actual facility. Correct if wrong and resubmit.
2. Check provider-facility eligibility rules Look up the payer's policy on which provider types can bill the service in the specific facility type.
3. Rebill under eligible combination If the provider is ineligible in this facility, rebill under a supervising provider or correct the facility type if it was reported incorrectly.
4. Appeal with credentialing evidence If the combination should be eligible, appeal with proof of provider credentials, facility privileges, and payer enrollment documentation.

Common RARC Pairings

The RARC code tells you exactly what triggered the CO-171:

How to Prevent CO-171

• Verify the place of service code on every claim before submission
• Maintain a reference matrix of eligible provider-facility combinations for each major payer
• Implement claim scrubbing that cross-references provider type, procedure code, and place of service
• Ensure provider credentialing includes facility-specific privileges for all locations where they practice
• Create billing checklists that address the provider-facility combination requirement for complex services
• Train scheduling staff to assign patients to appropriate provider-facility combinations

General Prevention

• Maintain a matrix of which provider types are authorized to bill specific services in each facility type for your major payers
• Verify the place of service code is accurate before claim submission — this is a simple but frequently overlooked source of CARC 171 denials
• Ensure provider credentialing includes privileges at the specific facility types where they provide services
• Implement claim scrubbing that cross-references provider type, CPT code, and place of service code to catch mismatches before submission
• Train billing staff on the distinction between CARC 170 (provider type) and CARC 171 (provider type + facility type) so they can address the correct issue
• Conduct regular audits of provider-facility billing patterns to identify recurring mismatches
• Create feedback loops between clinical scheduling and billing teams so facility assignments are correct from the start

Also Filed As

The same CARC 171 may appear with different Group Codes:

Related Denial Codes