CO-60: Outpatient Services Not Covered Near Inpatient Stay
Provider absorbs the cost. If the services are related to the inpatient stay, bundle them into the inpatient claim. If unrelated, appeal with clinical documentation.
What Does CO-60 Mean?
CO 60 is a contractual obligation adjustment where the payer bundled the outpatient services into the inpatient DRG or per-diem payment. The provider cannot bill the patient for the denied outpatient charges. If the outpatient services are truly part of the inpatient episode, the charges should be included on the inpatient claim. If the services are for an unrelated condition, the provider should appeal with clinical documentation demonstrating the clinical distinction.
CARC 60 fires when a payer determines that outpatient services billed separately should have been bundled into an inpatient payment because they fall within the payer's defined timeframe before or after an inpatient admission. This is a bundling denial, not a coding error or coverage exclusion. The payer is saying these outpatient charges are already accounted for in the DRG or per-diem inpatient payment.
Medicare's 72-hour rule (also called the 3-day payment window) is the most well-known version of this policy. For hospitals subject to IPPS (Inpatient Prospective Payment System), diagnostic services and other outpatient services provided within 72 hours before a Medicare inpatient admission are bundled into the DRG payment. The window extends to 24 hours before admission for hospitals not subject to IPPS. Commercial payers have their own bundling windows that may be more or less restrictive.
The key exception is when the outpatient services are for a condition entirely unrelated to the inpatient admission. If a patient comes to the emergency department for a broken arm on Monday and is then admitted on Thursday for a scheduled cardiac procedure, the ED visit should not be bundled into the cardiac DRG. Documenting this clinical distinction is the basis for a successful appeal. Pre-admission testing that directly relates to the planned admission, however, is appropriately bundled and should not be billed separately.
Common Causes
| Cause | Frequency |
|---|---|
| Outpatient services billed within the payer's bundling window Payers consider outpatient services rendered within a defined window (commonly 72 hours for Medicare, varies by commercial payer) before an inpatient admission to be part of the inpatient episode of care. These outpatient charges are bundled into the inpatient DRG payment. | Most Common |
| Pre-admission testing billed separately Diagnostic tests, labs, or imaging performed shortly before a scheduled inpatient admission are considered part of the admission workup and should be bundled into the inpatient claim rather than billed as separate outpatient services. | Most Common |
| Post-discharge outpatient services within bundling period Outpatient services rendered shortly after an inpatient discharge (within the payer's defined window) are considered part of the same episode of care and denied as they should have been included in the inpatient payment. | Common |
| Billing sequence or timing errors The outpatient claim was submitted before the inpatient claim processed, or the dates of service on the outpatient claim fall within the bundling window, causing the payer to deny the outpatient charges. | Common |
| Insufficient documentation of medical necessity for separate outpatient services The clinical documentation does not clearly establish that the outpatient services were for a condition or diagnosis unrelated to the inpatient admission, which would exempt them from the bundling rules. | Occasional |
How to Resolve
Determine whether the outpatient services legitimately fall within the bundling window or are for an unrelated condition, then either bundle them into the inpatient claim or appeal with clinical documentation.
- Verify the bundling window Confirm whether the outpatient services fall within the payer's defined bundling window relative to the inpatient admission date.
- Coordinate with inpatient billing If the services should be bundled, work with the inpatient billing team to include the charges on the inpatient claim and ensure the DRG is correct.
- Appeal for clinically distinct services If the outpatient services are for an unrelated condition, submit an appeal with documentation showing different diagnoses, different body systems, or different treating providers.
Common RARC Pairings
The RARC code tells you exactly what triggered the CO-60:
| RARC | Description |
|---|---|
| M15 | Separately billed services have been bundled as they are considered components of the same procedure Verify whether the outpatient services are truly bundled into the inpatient payment → |
| N657 | This service is not covered per the patient's benefit plan Review the bundling policy and determine if the services are for an unrelated condition → |
How to Prevent CO-60
- Implement scheduling systems that flag outpatient services within the payer-specific bundling window before and after inpatient admissions.
- Establish communication protocols between outpatient and inpatient billing departments.
- Train billing staff on the 72-hour rule for Medicare and corresponding commercial payer policies.
- Document clearly when outpatient services are for conditions unrelated to a planned inpatient admission.
General Prevention
- Establish communication protocols between outpatient and inpatient billing departments to coordinate claims submission.
- Train billing staff on payer-specific bundling windows (72 hours for Medicare, varying for commercial payers).
- Document clearly when outpatient services are for conditions unrelated to a planned or recent inpatient admission.
- Use condition code 44 (inpatient admission changed to outpatient) appropriately to avoid triggering bundling edits.
Also Filed As
The same CARC 60 may appear with different Group Codes:
Related Denial Codes
Sources
- https://www.mdclarity.com/denial-code/60
- https://www.codingahead.com/denial-code-60/
- Codes maintained by X12. Visit x12.org for official definitions.