CO-178: Patient Has Not Met Spend Down Requirements

What Does CO-178 Mean?

With CO (Contractual Obligation), the spend down requirement was not met and the payer cannot process the claim. The provider should verify the patient's spend down status, help accumulate qualifying expenses, and resubmit once the threshold is satisfied. If the spend down was actually met on the date of service, appeal with documentation of qualifying expenses.

CARC 178 appears when a patient's Medicaid eligibility is contingent on meeting a monthly spend down requirement and that threshold has not yet been reached. Spend down works similarly to a deductible — the patient must incur a specified dollar amount of medical expenses each month before Medicaid coverage activates.

This code is specific to Medicaid programs that use spend down as an eligibility mechanism. The patient's income exceeds the Medicaid threshold, but they qualify for coverage once their medical expenses bring their effective income below the limit. Until the patient submits enough qualifying medical bills to the state and the spend down is verified as met, claims will be denied under this code.

Common Causes

How to Resolve

1. Verify spend down amount and accumulation Contact the state Medicaid agency to confirm the patient's monthly spend down requirement and current accumulation.
2. Help the patient submit qualifying expenses Assist the patient in gathering and submitting all qualifying medical bills to the state for spend down credit.
3. Resubmit when threshold is met Once the state confirms the spend down is satisfied, resubmit the claim with the verification documentation.
4. Appeal if accumulation was incorrect If the state's records do not reflect expenses that should count toward the spend down, submit documentation of those expenses and appeal.

Common RARC Pairings

The RARC code tells you exactly what triggered the CO-178:

How to Prevent CO-178

• Verify the patient's spend down status before providing services
• Help patients track their spend down accumulations and submit qualifying expenses promptly
• Schedule services after the spend down has been met for the month when possible
• Maintain records of patient spend down requirements and current accumulations
• Coordinate with the state Medicaid agency to ensure all qualifying expenses are credited

Also Filed As

The same CARC 178 may appear with different Group Codes:

Related Denial Codes