CO-97 is one of the denials billing teams see most often, and one of the easiest to handle badly. Some teams resubmit with a modifier every time. Others write every CO-97 off. Both habits cost money, and the first one creates compliance risk.

This guide explains what the code means, why it happens, and how to decide what to do with each one.

What CO-97 means

A denial on a remittance has two parts: a group code and a reason code.

  • CO (contractual obligation) means the provider is responsible for the amount under the payer contract. In most cases the patient cannot be billed for it.
  • 97 is the claim adjustment reason code that says, in short, the benefit for this service is included in the payment or allowance for another service or procedure that has already been adjudicated.

In plain language: the payer believes this service is part of another service it already paid for on the same day, so it will not pay for it separately. This is usually called a bundling denial.

The remittance often includes a remark code (RARC) with more detail. Always read it. It can point to the specific edit or policy behind the denial.

Why payers bundle services

NCCI procedure-to-procedure edits

For Medicare and Medicaid, the National Correct Coding Initiative (NCCI) publishes procedure-to-procedure (PTP) edits. Each edit is a pair of codes that should not normally be paid together for the same patient on the same date by the same provider. Many commercial payers use NCCI edits as well, and some add their own bundling rules on top.

Each PTP edit has a modifier indicator:

  • 0 means a modifier cannot be used to bypass the edit. The column two code will not be paid with the column one code.
  • 1 means a modifier may be used, but only when the documentation shows the second service was truly separate (for example, a different session, a different anatomic site, or a separate incision).

Edits are updated quarterly, so check the version in effect on the date of service, not today's table.

E/M services on the same day as a procedure

Many procedures include a basic evaluation as part of the procedure itself. An evaluation and management (E/M) visit billed on the same day can be bundled unless the record shows a significant, separately identifiable E/M service beyond the usual pre-procedure work. That is what modifier 25 is for, and it only belongs on the claim when the documentation supports it.

Global surgery packages

Visits during a procedure's global period that relate to the procedure are generally part of the surgical package. These also come back as bundling denials when billed separately.

How to work a CO-97 denial, step by step

1. Identify the pair

Find the other service on the same date that the payer paid. It may be on the same claim or on a different claim from the same day. Note both codes and any modifiers.

2. Check the edit

Look up the pair in the NCCI PTP table for the quarter of the date of service (or in the payer's own policy if it does not follow NCCI). Note the modifier indicator.

3. Read the documentation

This is the step that decides everything. Ask the provider or review the note:

  • Was the second service performed at a separate session, on a different site or organ system, or through a separate incision or encounter?
  • For an E/M visit, does the note show a significant, separately identifiable evaluation beyond the procedure's usual work?

If the documentation does not support a separate service, the denial is probably correct.

4. Choose the right action

  • The bundling is correct. Adjust the line according to the contract. Do not transfer a CO amount to the patient.
  • The documentation supports a separate service, the edit allows a modifier, and the original claim left it off. Submit a corrected claim with the appropriate modifier (for example modifier 59, or the more specific XE, XS, XP or XU where the payer accepts them; modifier 25 for a separately identifiable E/M). On a professional claim, a corrected claim is usually sent as a replacement claim, with frequency code 7 and the original claim number. Check each payer's rules.
  • The claim was already coded correctly with a supported modifier and still denied. Request a reconsideration or file an appeal with the relevant part of the record and a short explanation of why the services were distinct.

A modifier is a statement about what happened during the visit. Adding one only to get a claim paid, without documentation behind it, is a coding error and a compliance risk.

5. Watch the deadline

Corrected claims and appeals have their own deadlines, and they vary by payer. Track them from the date of the denial.

Preventing repeat CO-97 denials

One CO-97 is a claim problem. The same CO-97 every week is a process problem. A few habits help:

  • Run front-end edits. Most practice management systems and clearinghouses can check NCCI pairs before the claim leaves.
  • Group denials by code pair and provider. If the same pair keeps denying, look at the documentation template, the charge capture workflow or a provider's coding habit.
  • Give feedback to providers with examples. Short, specific notes ("this pair needs a separate site documented to support modifier 59") work better than general reminders.
  • Re-check edits each quarter. A pair that paid last quarter can deny this quarter.

How FZ Digital Solutions handles bundling denials

On our denial management and appeals work, bundling, incidental and mutually exclusive denials are reviewed against the documentation, coding rules and payer policy. Modifier corrections are made only when the documentation supports them, and we report recurring denial patterns back to the practice so the cause can be fixed. Payers make the final decision on every claim and appeal, so results cannot be guaranteed.

Questions about a denial pattern in your practice? Book a consultation. Please do not send patient information or PHI by email.

This article is general information, not coding or legal advice. Code sets, NCCI edits and payer policies change regularly; always check the version that applies to the date of service.