CO-135: Interim Bills Cannot Be Processed

What Does CO-135 Mean?

CO-135 is the primary pairing for this code. The CO group code indicates the rejection is a contractual matter — the payer's system or contract does not support the interim billing submission as formatted, and the provider is responsible for correcting it. Under CO, the patient cannot be billed for the rejected amount. The provider must either fix and resubmit the interim bill or wait to submit a final bill at discharge.

CARC 135 appears on your remittance when you submit an interim bill — a claim for ongoing inpatient or long-term care services before the patient is discharged — and the payer rejects it. This is a procedural rejection, not a clinical or coverage denial. The payer is not questioning whether the service was medically necessary or whether the patient has coverage. They are saying that the interim bill itself cannot be processed as submitted.

The most common trigger is using an incorrect type of bill (TOB) code. Interim billing requires specific frequency codes — xx2 for the first interim claim, xx3 for continuing interim claims, and xx4 for the last interim claim before the final bill. If the TOB code is wrong, the payer's system cannot identify the claim as an interim bill and will reject it. Other frequent causes include missing required fields (statement covers period, condition codes, occurrence codes), submitting a continuing interim bill when the payer has no initial interim claim on file, and submitting interim bills more frequently than the payer allows.

Some payers do not accept interim bills at all for certain service types. In those cases, the provider must hold all charges and submit a single final bill upon discharge. Before submitting interim claims, always verify the payer's specific interim billing requirements — including which facility types and service categories qualify, what frequency is allowed, and which data elements are required.

Common Causes

How to Resolve

Verify the payer's interim billing requirements, correct the bill type and required fields, and resubmit — or hold the claim for final billing at discharge.

1. Verify TOB code and payer requirements Confirm the type of bill code is correct for interim billing and that the payer accepts interim bills for this service type under your contract.
2. Complete all required fields Ensure all payer-required fields for interim billing are present, including statement covers period, condition codes, and occurrence codes.
3. Resubmit or hold for final bill Resubmit the corrected interim bill, or if the payer does not support interim billing for this service, hold the claim and submit a final bill upon discharge.
4. Track interim bill continuity Ensure your initial interim claim is on file with the payer before submitting continuing or final interim bills to avoid chain-of-claim rejections.

Common RARC Pairings

The RARC code tells you exactly what triggered the CO-135:

How to Prevent CO-135

• Verify each payer's interim billing policy before submitting interim claims — confirm eligible service types, required TOB codes, and submission frequency
• Train billing staff on the correct type of bill codes for interim billing (xx2, xx3, xx4) and the required data elements
• Implement billing system edits that validate interim billing requirements before claim submission to catch errors at the front end
• Track all submitted interim bills to prevent duplicates and maintain proper claim sequencing

General Prevention

• Verify the payer's interim billing policy before submitting interim claims — confirm which service types qualify and the required submission frequency
• Use the correct type of bill (TOB) codes for interim billing and train staff on the difference between initial, continuing, and final interim bill codes
• Ensure all required fields for interim billing are completed before submission, including statement covers period, condition codes, and occurrence codes
• Track all submitted interim bills to prevent duplicate submissions and ensure continuity between initial and subsequent interim claims
• Submit interim bills within the payer's required timeframes to avoid timely filing rejections
• Implement billing system edits that validate interim billing requirements before claim submission

Also Filed As

The same CARC 135 may appear with different Group Codes:

Related Denial Codes