CO-96: Non-Covered Charges

What Does CO-96 Mean?

With CO (Contractual Obligation), the CARC 96 adjustment is the provider's responsibility. The payer denied or reduced payment because of the payer determines that the billed service, procedure, or supply is explicitly excluded from coverage under the patient's policy, including experimental treatments, cosmetic procedures, or alternative therapies. 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 96 indicates non-covered charges. The payer determined that the service or a portion of it does not meet coverage criteria under the patient's current plan benefits or the applicable coverage rules.

Common scenarios that trigger this adjustment include: the payer determines that the billed service, procedure, or supply is explicitly excluded from coverage under the patient's policy, including experimental treatments, cosmetic procedures, or alternative therapies; The wrong CPT code, missing modifier, or unsupported diagnosis code was submitted, causing the payer's system to classify a covered service as non-covered; The provider is not in the payer's network and no prior authorization was obtained for out-of-network services, resulting in the charge being classified as non-covered under the contractual terms. The group code paired with CARC 96 determines who bears the financial responsibility — CO places it on the provider as a contractual obligation, PR shifts it to the patient, OA indicates a coordination of benefits or other payer adjustment.

Common Causes

How to Resolve

1. Review the remittance details Examine the CO-96 adjustment and any accompanying RARC codes to identify the specific reason for the denial.
2. Identify the root cause Determine which issue applies: service not covered under the patient's insurance plan, incorrect procedure or diagnosis code, out-of-network provider without authorization, among others.
3. Correct the claim Address the identified issue — update the claim data in your billing system to resolve the non-covered 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 with documentation of medical necessity and clinical justification. Include physician notes, prior authorization records if applicable, and any relevant coverage policies that support the service. Reference the specific plan language or LCD/NCD that covers the service. For Medicare, file the redetermination within 120 days.

Common RARC Pairings

The RARC code tells you exactly what triggered the CO-96:

How to Prevent CO-96

• Verify insurance coverage and specific benefit details for every service before rendering care, checking for plan exclusions and coverage limits
• Obtain an Advance Beneficiary Notice (ABN) from the patient before providing any service that may not be covered, particularly for Medicare patients
• Review payer-specific coding guidelines regularly to ensure procedure codes, modifiers, and diagnosis codes meet coverage criteria
• Check the patient's remaining benefits for services with annual or lifetime limits before scheduling appointments
• Maintain a reference list of commonly non-covered services by payer and train scheduling staff to flag these services for benefit verification
• Conduct regular coding audits to catch incorrect codes or missing modifiers that cause covered services to be adjudicated as non-covered

Also Filed As

The same CARC 96 may appear with different Group Codes:

Related Denial Codes