CO-215: Third Party Subrogation Settlement

What Does CO-215 Mean?

CO-215 tells you that the third party settlement creates a contractual write-off — the billed amount (or a portion of it) was already covered by the settlement, and your contract with the payer does not allow you to bill the patient for this adjusted amount. The provider absorbs the reduction. This is the most common pairing for CARC 215 and typically appears when the payer has confirmed that a settlement covers the billed services.

When CARC 215 appears on a remittance, the payer has determined that a third party liability settlement — such as a workers compensation settlement, auto insurance settlement, or personal injury settlement — has already provided payment or is expected to provide payment for the services you billed. Subrogation is the legal process by which a health insurer recovers costs from a liable third party, and CARC 215 signals that the payer believes the third party settlement supersedes or reduces its own payment obligation for the claim.

This code is most frequently encountered in injury-related cases where a patient received treatment for injuries caused by another party's negligence — motor vehicle accidents, workplace injuries, slip-and-fall incidents, and similar liability situations. The payer may have placed a subrogation lien on the claim or may have received notification that a settlement was reached, prompting the adjustment. The key question you need to answer is whether the settlement actually covers the specific services and dates of service on the denied claim.

CARC 215 almost always appears with Group Code CO (contractual obligation), meaning the provider must absorb the adjustment and cannot bill the patient for the denied amount. In some multi-payer coordination scenarios, it may appear with OA (other adjustment), indicating the balance should be submitted to another payer. Either way, do not bill the patient without first verifying the settlement scope and confirming the appropriate next step with the payer's subrogation department.

Common Causes

How to Resolve

Determine whether the third party settlement actually covers the billed services, then either write off the amount or appeal with documentation showing the services fall outside the settlement scope.

1. Review settlement documentation Obtain the settlement details from the payer's subrogation department. Confirm the settlement covers the specific dates of service and injury being billed. Compare the settlement amount against the billed charges.
2. Verify the services are within settlement scope Check whether the billed services relate to the injury or condition addressed by the settlement. Services for unrelated conditions or dates outside the settlement period should not be adjusted under CARC 215.
3. Appeal if services are outside settlement scope If the denied services are not covered by the third party settlement, prepare an appeal with medical records showing the services relate to a different condition or were provided outside the settlement period. Include any settlement agreements that define the scope.
4. Post the contractual write-off if valid If the settlement does cover the services, post the CO-215 adjustment as a contractual write-off. Do not transfer this balance to the patient. Flag the account for any future claims that may also be affected by the settlement.

Common RARC Pairings

The RARC code tells you exactly what triggered the CO-215:

How to Prevent CO-215

• Screen patients at registration for third party liability involvement (auto accidents, workers comp, personal injury) and flag their accounts before claims go out
• Contact the payer's subrogation department proactively before submitting claims for injury-related services to confirm whether a settlement exists
• Maintain a tracking system for patients with known third party liability cases to prevent billing conflicts
• Ensure settlement documentation is obtained and reviewed before filing claims for services related to the covered injury

General Prevention

• Screen patients for third party liability involvement (auto accidents, workers compensation, personal injury) at registration and before claim submission
• Maintain accurate documentation of all third party settlements including covered dates, amounts, and services
• Flag accounts with known third party involvement in the practice management system to prevent premature billing to the health plan
• Verify with the payer's subrogation department whether a settlement exists before submitting claims for injury-related services
• Submit claims promptly and within filing deadlines to avoid complications when settlements are reached after claim submission

Also Filed As

The same CARC 215 may appear with different Group Codes:

Related Denial Codes