CO-24: Charges Covered Under Capitation/Managed Care

What Does CO-24 Mean?

With CO (Contractual Obligation), the CARC 24 adjustment for charges covered under capitation/managed care is a contractual reduction. The provider absorbs this amount per the payer contract or regulatory payment methodology. The patient is not responsible for the adjusted amount. Review the remittance to confirm the adjustment is consistent with your contract terms.

CARC 24 means the payer adjusted the payment based on charges covered under capitation/managed care. The reimbursement was calculated using the payer's fee schedule, contracted rate, or regulatory payment methodology rather than the billed charge.

Common scenarios that trigger this adjustment include: the service billed is already covered under the provider's capitation agreement with the managed care plan; Provider submitted a fee-for-service claim for a service that should be paid through the capitation arrangement; Claim was submitted to the wrong plan within a managed care organization. The group code paired with CARC 24 determines who bears the financial responsibility — CO places it on the provider as a contractual obligation, OA indicates a coordination of benefits or other payer adjustment, PR shifts it to the patient.

Common Causes

How to Resolve

1. Review the adjustment against contract terms Compare the CO-24 adjustment with your payer contract to confirm the reduction is consistent with agreed terms or regulatory methodology.
2. Verify the adjustment amount Confirm the dollar amount of the adjustment is calculated correctly based on the contracted rate and the service provided.
3. Appeal if the adjustment is incorrect If the service is not covered under the capitation agreement, appeal with the specific contract terms showing the service is excluded from capitation. Provide the capitation agreement section that defines covered services.
4. Process the contractual adjustment If the adjustment is correct per contract terms, process it accordingly in your billing system. This amount cannot be transferred to the patient.

Common RARC Pairings

The RARC code tells you exactly what triggered the CO-24:

How to Prevent CO-24

• Maintain a clear list of services included in capitation agreements
• Configure billing system to flag capitated services before claim submission
• Train billing staff on capitation vs fee-for-service distinctions
• Review capitation contracts regularly for changes in covered services

Also Filed As

The same CARC 24 may appear with different Group Codes:

Related Denial Codes