A CO-97 denial tells you the payer won’t pay a service separately because it considers that service already paid as part of another procedure on the same claim or a related claim. This is bundling. It is one of the most common reasons a practice loses money on work it actually did.
This guide covers what the code means, why it happens, how to tell whether the denial is correct, and how to correct or appeal it.
What the CO-97 denial code means
CO-97 is made of two parts:
- CO (Contractual Obligation): This group code means the adjustment falls under your contract with the payer. In general, you cannot shift the denied amount to the patient.
- 97: This reason code means the benefit for the service is included in the payment or allowance for another service or procedure that has already been adjudicated.
In plain terms, the payer is saying, “We already paid for this when we paid for the other service.” The denied line may be a minor procedure done with a larger one, a visit billed during a surgical global period, or a supply or service the payer treats as part of a main procedure.
The remittance advice often includes remark codes that explain the decision in more detail. Always read them. They usually point to the specific edit or policy behind the denial.
Why services get bundled
Payers use coding edits to stop the same work from being paid twice. For Medicare and many other payers, these edits come from the National Correct Coding Initiative, which lists code pairs that should not normally be billed together for the same patient on the same date. Commercial payers may use their own bundling rules on top of these.
Common causes of a CO-97 denial include:
- Component codes billed with a comprehensive code. If one procedure is considered part of another, billing both triggers the edit.
- Services inside a global surgical period. Routine follow-up care after surgery is usually included in the surgical payment. A separate visit in that window may be denied unless it is clearly unrelated or otherwise separately payable under payer rules.
- Evaluation and management services billed on the day of a procedure. Payers often assume the visit was part of the decision to perform the procedure unless the documentation shows a significant, separately identifiable service.
- Missing or incorrect modifiers. Some code pairs can be paid separately when the services were truly distinct, such as a different anatomic site or a separate session, but only when the right modifier is appended and the record supports it.
- Unbundling errors. Billing the separate parts of a service instead of the single code that describes the whole service.
- Supplies and incidental services. Items the payer treats as included in a procedure are denied when billed on their own line.
- Payer-specific policies. A service that one payer pays separately may be bundled by another.
First step: decide whether the denial is correct
Not every CO-97 denial should be appealed. Some are correct, and appealing them wastes time. Before acting, review:
- The remittance details. Find which line was denied and which service the payer says it was bundled into. Note any remark codes.
- The coding edit or payer policy. Check whether the code pair is subject to an edit and whether a modifier is allowed to bypass it.
- The clinical documentation. Does the record show the services were separate and distinct? Different site, different session, different problem, or a significant, separately identifiable visit?
- The claim as submitted. Look for coding errors, wrong dates of service, missing modifiers, or a modifier placed on the wrong line.
This review usually points to one of three outcomes: the denial is valid, the claim had an error you can fix, or the payer applied an edit that should not have applied.
How to fix and appeal a CO-97 denial
When the denial is valid
If the service really is included in the other procedure and the documentation doesn’t support separate payment, accept the adjustment and write it off as a contractual adjustment. Don’t bill the patient for it. Then look at why it was billed, because a repeated pattern points to a coding or charge capture habit worth correcting.
When the claim had an error
If the services were distinct but the claim didn’t show it, submit a corrected claim. Examples include a missing modifier, a wrong code, or an unbundled code that should have been a single comprehensive code. Follow the payer’s process for corrected or replacement claims rather than sending a new claim, which can be denied as a duplicate.
Only add a modifier when the documentation clearly supports it. Using modifiers just to get past edits is a known compliance risk and can draw payer scrutiny.
When the payer applied the edit incorrectly
If the claim was coded correctly and the record supports separate payment, file a formal appeal or reconsideration. A strong appeal usually includes:
- Patient and claim identifiers, the date of service, and the denied line
- A short, clear explanation of why the service was separate and distinct from the procedure it was bundled into
- Supporting documentation, such as operative notes, visit notes, and orders that show the different site, session or problem
- References to the coding guideline or payer policy that allows separate payment
- A clear request for reprocessing and payment of the denied line
Check each payer’s appeal deadlines, required forms and submission method before sending. Missing a filing limit can turn a winnable appeal into a permanent loss. Track every appeal until a decision comes back, and escalate to the next appeal level if the payer upholds the denial and you still believe it is wrong.
Some payers will fix clear processing errors through a phone call or a reopening request instead of a full appeal. It’s worth asking when the error is obvious.
For a broader view of the workflow, see our guide to the denial management process in medical billing.
How to prevent CO-97 denials
Appeals recover some revenue, but prevention saves more time. Practical steps include:
- Check bundling edits before submission. Claim scrubbing tools can flag code pairs that are likely to be bundled so they can be reviewed before the claim goes out. Learn more about claim scrubbing benefits.
- Document distinct services clearly. Providers should note separate sites, sessions, problems or decision-making when they bill more than one service in an encounter.
- Train coders on modifier rules. Make sure modifiers are used when appropriate and supported, and not as a shortcut.
- Track global periods. Know when a patient is in a post-operative period so visits are coded and documented correctly.
- Keep payer policies current. Commercial payers change bundling rules, so keep a reference of the policies for your main payers.
- Review denial trends. If CO-97 keeps showing up for the same code pairs or providers, fix the root cause instead of appealing each claim.
Cleaner claims at submission also help your overall first-pass results. Our article on improving your clean claim rate covers this in more detail.
How Billing Benefit can help
Billing Benefit is a medical billing company in Sugar Land, Texas, near Houston. It works with practices across Greater Houston, Texas and the rest of the US. Its medical billing and coding services include:
- Charge capture and coding
- Claim submission and follow-up
- Payment posting and denial management
- Patient billing and collections
Billing Benefit also offers medical billing audits that include a comprehensive billing review, recovery of lost revenue, and preventative strategies and education. That kind of review can be useful when bundling denials keep coming back. Clients receive a range of reports at the end of each month, including account activity and aging.
Services are tailored to practices ranging from independent practices to large healthcare facilities, with specialty billing pages for vision and ophthalmology, dental, neurology and sleep, and mental health. You can read more about its denial management services.
To talk about CO-97 or other denials in your practice, call (832) 674-1900, email info@billingbenefit.com, or use the Book Free Consultation option on the website. Office hours are Monday to Friday, 9 AM to 5 PM Central. You can also reach the team through the contact page.
Written with AI help and checked by Billing Benefit.
