CO-27: Expenses Incurred After Coverage Terminated

What Does CO-27 Mean?

CO-27 means the payer is treating the terminated-coverage denial as a contractual write-off. Under your participation agreement, the payer is not obligated to pay for services rendered outside the patient's coverage period, and the CO designation means you cannot directly bill the patient for the denied amount based on this adjudication. This is the more problematic group code for providers because it limits your immediate collection options. Your best avenue is to appeal if the termination was retroactive and your eligibility verification showed active coverage, or to redirect the claim to another carrier if the patient has other insurance.

When CARC 27 appears on a remittance, the payer is telling you that the patient's insurance policy was no longer active on the date the service was rendered. The coverage had been cancelled, expired, or terminated — whether due to non-payment of premiums, voluntary cancellation, job loss, disenrollment from a managed care plan, or the end of a coverage period — and the claim falls after that termination date.

One of the most frustrating aspects of CARC 27 is retroactive termination. Payers sometimes discover premium non-payment weeks or months after the fact and backdate the coverage termination to a date before your service was rendered. This means your eligibility verification showed active coverage at the time of the visit, but the payer later revoked that coverage retroactively. This scenario is particularly common in the first quarter of the year when plan renewals and carrier market exits take effect. For 2026, the wave of Medicare Advantage plan exits has amplified this issue, affecting hundreds of thousands of members whose coverage status changed abruptly.

The financial routing depends on the Group Code. Under CO-27, the provider must write off the amount and cannot bill the patient under the health plan's adjudication. Under PR-27, the patient is financially responsible and the provider can bill them directly. The distinction matters significantly: CO-27 requires you to find another payer or absorb the loss, while PR-27 gives you a direct path to patient collection. In either case, the first step is always to verify whether the termination date is accurate and whether the patient has other active coverage.

Common Causes

How to Resolve

Verify the actual termination date with the payer, determine if retroactive termination is valid, and either appeal, redirect to another carrier, or bill the patient.

1. Verify termination date and gather eligibility records Confirm when coverage ended. If you have eligibility verification records showing active coverage on the service date, compile them for an appeal.
2. Appeal retroactive termination if applicable File a formal appeal with your eligibility verification documentation proving coverage appeared active at the time of service. The payer should not retroactively shift liability to the provider when their own system confirmed active status.
3. Redirect to another carrier or handle as self-pay If the patient has other active insurance, redirect the claim. If no coverage exists and the appeal is denied, you may need to pursue the balance through other means depending on state regulations.

Common RARC Pairings

The RARC code tells you exactly what triggered the CO-27:

How to Prevent CO-27

• Verify insurance eligibility at every visit using real-time electronic verification, specifically checking for coverage termination dates
• Submit claims within 24 to 48 hours of service delivery to minimize the window for retroactive coverage changes
• Save and archive eligibility verification responses showing active coverage status — these are your best defense against retroactive termination denials
• Monitor payer announcements for plan exits and enrollment changes that may affect patient coverage status
• Establish front-desk SOPs that flag patients whose coverage may be at risk due to employment changes, upcoming plan terminations, or missed premiums

General Prevention

• Verify insurance eligibility at every patient visit using real-time electronic verification, checking specifically for coverage termination dates and active status
• Maintain updated patient insurance records by confirming coverage details at check-in and requesting updated insurance cards whenever a patient's employment or life circumstances change
• Submit claims within 24 to 48 hours of service delivery to minimize the risk of coverage changes between service date and claim submission
• Establish front-desk standard operating procedures for eligibility verification that include checking coverage effective and termination dates, not just whether the policy number is valid
• Use claims scrubbing tools that flag claims where the payer's eligibility records show terminated coverage before submission
• Monitor payer announcements for plan exits or significant enrollment changes that could affect patient coverage status

Also Filed As

The same CARC 27 may appear with different Group Codes:

Related Denial Codes