Not medically necessary
The payer decided the service was not needed for this patient based on the diagnosis and its coverage policy.
CO = Contractual Obligation. The provider owes the difference. The patient cannot be billed for this amount. The same reason code can appear with a different group code; the group decides who may be billed.
Usual causes
- Diagnosis on the claim is not on the payer's covered list for this service (see the LCD or medical policy).
- Frequency limits exceeded (a test repeated sooner than the policy allows).
- Documentation does not show the signs, symptoms or failed treatments the policy requires.
The fix
Pull the policy the payer used (N115 names an LCD, N386 an NCD). If a documented diagnosis that meets the policy was left off the claim, send a corrected claim. Otherwise appeal with the records, a physician letter and the policy criteria marked up to show how the patient meets them. If a Medicare ABN was signed, bill the patient with modifier GA.
Appeal or corrected claim?
Appeal when the records support the service. Corrected claim only when the right diagnosis was documented but not billed. Never change a diagnosis to fit a policy.
Deadline to watch
Medicare redetermination: 120 days from the remittance date. Commercial appeals: 60 to 180 days per contract.
Exact limits are in your payer contract or provider manual. When in doubt, send the correction or appeal this week.
Often seen together
Medicare applied a Local Coverage Determination and the diagnosis or frequency did not meet it. Appeal with records, or bill the patient with GA if an ABN was signed.
CO-50 in short
What does CO-50 mean?
The payer decided the service was not needed for this patient based on the diagnosis and its coverage policy. The official X12 text reads: "These are non-covered services because this is not deemed a 'medical necessity' by the payer. Usage: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present."
What usually causes a CO-50 denial?
Diagnosis on the claim is not on the payer's covered list for this service (see the LCD or medical policy). Frequency limits exceeded (a test repeated sooner than the policy allows). Documentation does not show the signs, symptoms or failed treatments the policy requires.
How do I fix CO-50?
Pull the policy the payer used (N115 names an LCD, N386 an NCD). If a documented diagnosis that meets the policy was left off the claim, send a corrected claim. Otherwise appeal with the records, a physician letter and the policy criteria marked up to show how the patient meets them. If a Medicare ABN was signed, bill the patient with modifier GA.
Should I appeal CO-50 or send a corrected claim?
Appeal. Appeal when the records support the service. Corrected claim only when the right diagnosis was documented but not billed. Never change a diagnosis to fit a policy.
What deadline applies to CO-50?
Medicare redetermination: 120 days from the remittance date. Commercial appeals: 60 to 180 days per contract.