CARC 277 Active

CO-277: Claim Undetermined During SHOP Exchange Grace Period

TL;DR

CO is unusual for this code — verify with the payer that it wasn't miscoded. CARC 277 should typically appear as OA since it's a temporary hold during the SHOP grace period.

Action
Review & Decide
Who Pays
Provider
Appeal
No
Patient Impact
None
Disclaimer
This content is for informational purposes only and does not constitute professional billing advice. Always verify information against your payer contracts and current coding guidelines. Consult a certified billing specialist for specific claim issues.

What Does CO-277 Mean?

CO-277 is uncommon for this code, as CARC 277 is designed for use with OA to reflect its temporary nature. If you receive CO-277, it may indicate a processing anomaly where the payer assigned a final contractual adjustment prematurely before the grace period concluded. Contact the payer to verify the Group Code is correct.

CARC 277 is specifically designed for claims involving patients enrolled through the Health Insurance SHOP (Small Business Health Options Program) Exchange. It fires when the payer cannot finalize the claim's disposition because the employer or employee has not yet paid the insurance premium within the 31-day grace period.

This code is distinct from CARC 257, which covers individual Marketplace plans with a 90-day grace period. CARC 277 applies exclusively to SHOP Exchange plans, which have a shorter 31-day grace period because the coverage is employer-sponsored through the small business exchange.

The claim is not permanently denied — it is temporarily undetermined. Once the grace period concludes, the payer will either reprocess and pay the claim (if the premium was paid) or deny it permanently (if coverage was terminated due to non-payment). The primary Group Code is OA, reflecting the temporary and informational nature of the adjustment.

How to Resolve

  1. Verify the Group Code Contact the payer to confirm whether CO is the intended Group Code. CARC 277 is designed for use with OA and CO may indicate a processing error.
  2. Request reprocessing If the CO assignment was an error, request the payer to reprocess the claim with the correct OA Group Code.
  3. Follow standard resolution if confirmed If the payer confirms CO is correct, follow the standard resolution — verify premium status, check the grace period timeline, and take action based on the outcome.
Do Not Appeal This Code

Claim Undetermined During SHOP Exchange Grace Period recorded under CO is a contractual obligation — the provider absorbs this amount per the payer agreement. Without an error in how the contract was applied, appeals don't apply. Review the accompanying RARC codes for context and accept the adjustment when the contract terms were applied correctly.

How to Prevent CO-277

Also Filed As

The same CARC 277 may appear with different Group Codes:

OA-277 PR-277

Related Denial Codes

CO-3 — Co-payment Amount CO-85 — Patient Interest Adjustment CO-100 — Payment Made to Patient/Insured CO-101 — Predetermination: Anticipated Payment CO-105 — Tax Withholding Amount

Sources

  1. https://www.mdclarity.com/denial-code/277
  2. https://resdac.org/sites/datadocumentation.resdac.org/files/Adjustment%20Reason%20Code%20Code%20Table%20(TAF%20Claims).txt
  3. https://x12.org/codes/claim-adjustment-reason-codes
  4. Codes maintained by X12. Visit x12.org for official definitions.