CO-89: Professional Fees Removed from Charges

What Does CO-89 Mean?

With CO (Contractual Obligation), the CARC 89 adjustment is the provider's responsibility. The payer denied or reduced payment because of the facility included professional fees (physician services) on the institutional claim instead of billing them separately on a CMS-1500 or 837P. The payer removes the professional component and adjusts the payment accordingly. The patient is not liable for this amount. If the denial is in error, the provider can correct and resubmit the claim or file an appeal with supporting documentation.

CARC 89 indicates professional fees removed from charges. The payer's adjudication logic determined that this service or procedure is included within another service that was billed on the same claim or a related claim.

Common scenarios that trigger this adjustment include: the facility included professional fees (physician services) on the institutional claim instead of billing them separately on a CMS-1500 or 837P. The payer removes the professional component and adjusts the payment accordingly; The claim was submitted with a bill type that includes both professional and technical components, but the payer's policy requires separate billing for the professional component; The claim was missing modifier 26 (professional component) or TC (technical component) to properly distinguish between the two, causing the payer to strip out the professional fees. The group code paired with CARC 89 determines who bears the financial responsibility — CO places it on the provider as a contractual obligation, OA indicates a coordination of benefits or other payer adjustment, PR shifts it to the patient.

Common Causes

How to Resolve

1. Review the remittance details Examine the CO-89 adjustment and any accompanying RARC codes to identify the specific reason for the denial.
2. Identify the root cause Determine which issue applies: professional component billed on institutional claim, incorrect bill type for professional services, missing modifier to separate professional and technical components, among others.
3. Correct the claim Address the identified issue — update the claim data in your billing system to resolve the professional fees removed from charges problem.
4. Resubmit the corrected claim Submit the corrected claim following the payer's resubmission guidelines. Include any supporting documentation that addresses the denial reason.
5. Appeal if the original claim was correct Appeal only if your contract allows professional fees to be included on the institutional claim. Include the contract terms, billing agreement, and documentation showing the agreed billing method. In most cases, resubmitting the professional component on a separate claim is the correct resolution.

Common RARC Pairings

The RARC code tells you exactly what triggered the CO-89:

How to Prevent CO-89

• Ensure professional and technical component billing is separated correctly on all claims before submission
• Use modifier 26 for professional component and TC for technical component on all applicable services
• Train billing staff on payer-specific rules for professional vs. technical component billing
• Implement claim scrubbing rules that flag professional fees on institutional claims before submission
• Review payer contracts to understand which services require separate professional billing

Also Filed As

The same CARC 89 may appear with different Group Codes:

Related Denial Codes