CO-187: Consumer Spending Account Payment Not Approved
The spending account payment was denied contractually. Determine the reason and submit documentation or redirect the balance.
What Does CO-187 Mean?
With CO (Contractual Obligation), the spending account denial is handled as a contractual issue between the provider and the spending account administrator. Review the denial reason and determine whether additional documentation can resolve the issue or if the balance needs to be redirected to the patient.
CARC 187 indicates that a payment attempted through the patient's consumer spending account — such as a Flexible Spending Account (FSA), Health Savings Account (HSA), or Health Reimbursement Arrangement (HRA) — was not approved. The spending account administrator determined the expense could not be reimbursed from the account.
Common reasons include the service not being an eligible expense under IRS guidelines or the plan design, insufficient funds in the account, missing substantiation documentation, or the expense already being covered by primary insurance. This code affects the payment source rather than the service coverage itself — the service may be legitimate, but the spending account cannot be used to pay for it.
Common Causes
| Cause | Frequency |
|---|---|
| Service not eligible for spending account reimbursement The service or product billed is not an eligible expense under the patient's FSA, HSA, or HRA per IRS guidelines or the specific plan design | Most Common |
| Insufficient funds in spending account The patient's consumer spending account does not have sufficient balance to cover the claimed amount | Most Common |
| Missing or insufficient documentation for spending account claim The spending account administrator requires additional documentation such as an Explanation of Benefits or itemized receipt to substantiate the expense | Common |
| Expense already reimbursed by primary insurance The expense was fully covered by the patient's primary insurance, so the spending account cannot also reimburse the same amount | Common |
| Spending account enrollment lapsed or terminated The patient's spending account enrollment has ended or the account is no longer active | Occasional |
How to Resolve
- Contact the spending account administrator Determine why the payment was not approved and what documentation or correction is needed.
- Submit substantiation if required Provide itemized receipts, EOBs, or medical necessity letters as required by the administrator.
- Verify expense eligibility Confirm the service qualifies under the account's eligible expense list.
- Redirect to patient if ineligible If the expense is not eligible for the spending account, bill the patient directly.
Submit documentation to the spending account administrator proving the expense is eligible, including itemized receipts, explanation of benefits from the primary insurer, and a letter of medical necessity if required.
Common RARC Pairings
The RARC code tells you exactly what triggered the CO-187:
| RARC | Description |
|---|---|
| N130 | You may need to review plan documents or guidelines Review the spending account plan to determine eligible expenses and documentation requirements → |
How to Prevent CO-187
- Verify patients' spending account eligibility and balance before processing payments
- Provide itemized receipts and documentation that meet spending account substantiation requirements
- Educate patients about which services are eligible for spending account reimbursement
- Submit claims with proper documentation to avoid substantiation requests
- Coordinate with the spending account administrator regarding documentation requirements
Also Filed As
The same CARC 187 may appear with different Group Codes:
Related Denial Codes
Sources
- https://www.mdclarity.com/denial-code-carcs
- https://x12.org/codes/claim-adjustment-reason-codes
- https://portal.ct.gov/-/media/ohs/health-it-advisory-council/apcd-advisory-group/data-submission-guide-workgroup/meeting-materials/6-30-22/carc-codes_final.pdf
- https://medicaid-documents.dhhs.utah.gov/Documents/pdfs/ClaimDenialCodes.pdf
- Codes maintained by X12. Visit x12.org for official definitions.