CO-262: Adjustment for Delivery Cost (Pharmaceuticals Only)
CO-262 is a contractual adjustment to pharmaceutical delivery charges. Verify the allowed amount and resubmit with corrections if needed.
What Does CO-262 Mean?
When paired with Group Code CO, the pharmaceutical delivery cost adjustment is a contractual obligation. The provider absorbs the difference between billed charges and the allowed amount for delivery. The adjustment cannot be transferred to the patient.
CARC 262 is a pharmaceutical-specific adjustment code that addresses the delivery cost component of a drug claim. When a pharmacy or provider bills for medication delivery, the payer may adjust this charge based on its fee schedule, contract terms, or coverage limitations for delivery services.
This code applies exclusively to pharmaceutical claims — it is not used for other types of delivery services. The adjustment may indicate that delivery costs are not covered at all under the plan, that the billed amount exceeds the payer's allowed maximum, that billing errors caused the charge to be denied, or that supporting documentation (delivery invoices, proof of delivery) was not provided.
Pharmaceutical delivery cost coverage varies significantly between payers. Some plans include delivery costs in the drug reimbursement, others pay a separate delivery fee up to a maximum amount, and some plans exclude delivery costs entirely. Understanding your payer's specific policy is essential for correct billing.
Common Causes
| Cause | Frequency |
|---|---|
| Pharmaceutical delivery costs not covered under the plan The payer's plan does not cover or reimburse delivery costs associated with pharmaceutical products, and the billed delivery charge is adjusted to zero | Most Common |
| Delivery cost exceeds allowed amount The delivery cost billed for pharmaceutical products exceeds the maximum allowable amount per the payer's fee schedule or contract terms | Common |
| Billing errors on delivery cost component Miscalculated delivery costs or incorrect pharmaceutical coding resulted in the delivery charge being denied or adjusted | Common |
| Insufficient documentation for delivery charges Missing invoices, proof of delivery, or supporting records required to substantiate the pharmaceutical delivery cost | Occasional |
How to Resolve
- Review claim for delivery cost applicability Confirm the delivery charge applies to pharmaceutical items and is correctly coded.
- Validate coding against payer requirements Check pharmaceutical item codes and delivery charge codes for accuracy.
- Verify charges are within allowed limits Compare delivery costs against the payer's allowed amounts.
- Submit supporting documentation Provide delivery invoices and proof of delivery with the resubmission.
- Resubmit corrected claim If errors were found, correct the delivery cost information and resubmit.
- Track claim status Monitor the claim and follow up if it remains unprocessed.
If the pharmaceutical delivery cost should be covered under the contract, file an appeal with supporting documentation including delivery invoices, proof of delivery, contract provisions supporting the charge, and a breakdown of the delivery cost calculation.
Common RARC Pairings
The RARC code tells you exactly what triggered the CO-262:
| RARC | Description |
|---|---|
| N381 | Alert: Consult your contractual agreement for restrictions, billing, and payment information. Review the pharmaceutical delivery cost provisions in the payer contract to verify the correct allowed amount → |
How to Prevent CO-262
- Ensure accurate documentation of all pharmaceutical deliveries with complete delivery details and invoices
- Verify that delivery charges are within the payer's allowed amounts before claim submission
- Stay current with payer-specific pharmaceutical delivery cost policies and fee schedules
- Implement regular auditing of pharmaceutical delivery documentation to catch errors before submission
- Train staff on proper documentation and coding practices for pharmaceutical delivery costs
Also Filed As
The same CARC 262 may appear with different Group Codes:
Related Denial Codes
Sources
- https://www.mdclarity.com/denial-code/262
- https://resdac.org/sites/datadocumentation.resdac.org/files/Adjustment%20Reason%20Code%20Code%20Table%20(TAF%20Claims).txt
- https://x12.org/codes/claim-adjustment-reason-codes
- Codes maintained by X12. Visit x12.org for official definitions.