CO-245: Provider Performance Program Withhold

What Does CO-245 Mean?

When paired with Group Code CO, the performance program withhold is a contractual adjustment. The withheld amount is between the provider and the payer per the contract terms. The provider absorbs this adjustment and cannot transfer it to the patient.

CARC 245 indicates that the payer is withholding a portion of the claim payment as part of a provider performance program established in your contract. This is not a denial or an error — it is a contractual mechanism where the payer sets aside a percentage of each payment, with the potential to return some or all of the withheld amount based on your performance on quality metrics.

These programs go by various names: pay-for-performance, value-based payment arrangements, shared savings programs, and risk-sharing agreements. The common thread is that the payer holds back a defined percentage and ties its return to measurable outcomes such as patient satisfaction scores, readmission rates, preventive care compliance, or cost efficiency targets.

The withheld amount is not lost revenue — it is contingent revenue. Providers who meet or exceed the performance targets may receive the full withhold back, and in some programs, earn additional incentive payments. Providers who fall short of targets may forfeit part or all of the withheld amount.

Common Causes

How to Resolve

1. Review your payer contract for withhold terms Check your contract for the specific withhold percentage, the quality metrics used for evaluation, and the performance period timeline.
2. Confirm the withhold calculation is accurate Verify that the withheld dollar amount correctly reflects the contracted withhold rate applied to the allowed amount for this claim.
3. Track withheld amounts across the performance period Keep a running tally of all CO-245 adjustments to monitor your total exposure and compare against the eventual withhold return.
4. Work toward quality metric targets Focus on meeting or exceeding the performance measures tied to your withhold program. Review payer-provided performance dashboards regularly.
5. Contact provider relations for discrepancies If the withhold amount or percentage does not match your contract terms, contact the payer's provider relations team with your contract and remittance documentation.

Common RARC Pairings

The RARC code tells you exactly what triggered the CO-245:

How to Prevent CO-245

• Understand the withhold percentage and performance metrics during contract negotiation so there are no surprises
• Track quality metrics throughout the performance period to stay on target for full withhold return
• Participate actively in quality improvement programs and payer-sponsored performance initiatives
• Monitor withhold amounts on each remittance to ensure accuracy against your contract terms
• Negotiate favorable withhold percentages and attainable performance benchmarks during contract renewals

General Prevention

• Understand the terms of your performance program withhold during contract negotiation
• Track quality metrics throughout the performance period to maximize withhold return
• Participate actively in quality improvement programs to meet performance targets
• Monitor withhold amounts on each remittance to ensure accuracy per contract
• Negotiate favorable withhold percentages and attainable performance metrics during contract renewal

Also Filed As

The same CARC 245 may appear with different Group Codes:

Related Denial Codes