As a clearinghouse provider with over 20 years of experience, we help medical billers and healthcare organizations manage their entire claim ecosystem. Since we have so much history with insurance companies and the healthcare organizations that submit claims to them, we’ve noticed a pattern of common denials. One such specific common denial code we see healthcare organizations struggle with is CO 4.

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What is denial code CO 4? Its a Claim Adjustment Group Code (CARC). The “CO” portion is an acronym for “Contractual Obligation”. Denials marked as “CO” mean that they’re based on the contract and as per the fee schedule amount.

Payers use this category of CARC codes when… a) A joint payer/payee agreement or regulatory requirement results in an adjustment that the member isn’t responsible for… or b) The provider’s charge exceeds the reasonable and customary amount and for which the patient is responsible. CO denials place financial responsibility on the provider. In other words, providers cannot assign financial responsibility to the patient or beneficiary. There are over 200 different denial codes within the CO CARC category.

Any medical biller will tell you that you can’t overturn every denial. Sometimes, denials are a signifier of a workflow issue that happened before submitting the claim. For that type, you can’t just correct it and then resubmit them for payment. You have to use them as a learning experience and adjust your workflow accordingly for future submissions. Luckily, CO 4 is not one of those types of denials…meaning that you can correct it and resubmit it.

But what is it? Denial code CO 4 states that the code for the procedure isn’t consistent with the modifier used OR that a necessary modifier is supposedly missing.

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