CO-264: Adjustment for Postage Cost (Pharmaceuticals Only)
CO-264 is a contractual adjustment to pharmaceutical postage charges. Verify coverage, correct any errors, and resubmit.
What Does CO-264 Mean?
When paired with Group Code CO, the pharmaceutical postage cost adjustment is contractual. The provider absorbs the postage cost and cannot transfer it to the patient.
CARC 264 is a pharmaceutical-specific adjustment code addressing postage costs associated with mailing medications to patients. This code applies when a pharmacy or provider bills for the postage of pharmaceutical products and the payer adjusts the charge.
Postage costs are distinct from shipping costs (CARC 263) — postage specifically refers to USPS or postal service charges for mailing medications. The adjustment may indicate the plan does not cover postage costs, the billed amount exceeds plan limits, billing codes were incorrect, or required prior authorization for mail-order pharmaceuticals was not obtained.
Mail-order pharmacy programs have specific postage reimbursement policies that differ from standard shipping. Some programs absorb postage costs in the dispensing fee, others have flat-rate postage allowances, and some require the pharmacy to absorb postage as a cost of doing business.
Common Causes
| Cause | Frequency |
|---|---|
| Pharmaceutical postage costs not covered under plan The payer's plan does not cover or reimburse postage costs associated with pharmaceutical products | Most Common |
| Billing errors on postage cost component Inaccurate claim submission for medications including wrong codes or miscalculated postage amounts | Common |
| Missing prior authorization for mail-order pharmaceuticals Required approvals not obtained before medication was mailed to the patient | Common |
| Postage cost exceeds plan-allowed limits Billed postage amounts exceeding the plan-allowed limits for pharmaceutical delivery | Occasional |
How to Resolve
- Confirm postage coverage under the plan Review payer policy on pharmaceutical postage cost reimbursement.
- Verify coding Ensure medication and postage codes are accurate.
- Submit supporting documentation Include postage receipts and medication orders.
- Resubmit corrected claim Correct postage cost information and resubmit.
If pharmaceutical postage costs should be covered under the contract, file an appeal with postage receipts, contract provisions supporting the charge, and documentation justifying the postage expense.
Common RARC Pairings
The RARC code tells you exactly what triggered the CO-264:
| RARC | Description |
|---|---|
| N381 | Alert: Consult your contractual agreement for restrictions, billing, and payment information. Review pharmaceutical postage cost provisions in the payer contract → |
How to Prevent CO-264
- Ensure accurate documentation of pharmaceutical postage costs with supporting records
- Verify eligibility and coverage for postage reimbursement before submitting claims
- Review payer-specific coding guidelines for pharmaceutical postage charges
- Conduct regular audits of pharmaceutical postage billing to catch errors before submission
- Train staff on proper billing practices for pharmaceutical delivery costs
Also Filed As
The same CARC 264 may appear with different Group Codes:
Related Denial Codes
Sources
- https://www.mdclarity.com/denial-code/264
- 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.