CO-233: Hospital-Acquired Condition or Preventable Error

What Does CO-233 Mean?

CO-233 assigns the cost of treating the hospital-acquired condition to the provider as a contractual obligation. The hospital cannot bill the patient for these charges. This reflects the policy that facilities are financially responsible for conditions that result from care quality failures during hospitalization.

CARC 233 is a quality-based payment denial tied to CMS's Hospital-Acquired Conditions (HAC) Reduction Program and similar payer policies. When a patient develops a condition during their hospital stay — such as a healthcare-associated infection (CAUTI, CLABSI, SSI, VAP), a fall with injury, a stage III/IV pressure ulcer, or a surgical error like wrong-site surgery or a retained foreign object — the payer will not reimburse the additional treatment costs associated with that condition.

The underlying policy rationale is that hospitals should prevent these conditions through proper clinical protocols. CMS and commercial payers use Present on Admission (POA) indicators to determine whether a diagnosis was present before hospitalization. If the POA indicator shows the condition was not present at admission, the payer assumes it was hospital-acquired and applies CARC 233 to deny the additional charges.

This code almost always appears with CO (contractual obligation), meaning the hospital absorbs the cost. The critical question when you see 233 is whether the POA indicators on the original claim were correctly assigned. If the condition was actually present on admission but the POA indicator was missing or incorrect, an appeal with clinical documentation can overturn the denial.

Common Causes

How to Resolve

Verify whether the condition was truly hospital-acquired by reviewing POA indicators and clinical documentation, then appeal with pre-admission evidence or accept the adjustment.

1. Verify POA documentation Confirm whether the POA indicators were correctly assigned on the original claim. Review the medical record for evidence the condition existed before admission.
2. Gather pre-admission evidence Collect documentation from pre-admission testing, emergency department records, referring physician notes, or transfer records that show the condition was present before the patient was admitted.
3. Appeal or accept Submit an appeal with corrected POA documentation and clinical evidence if the condition was pre-existing. If the condition was genuinely hospital-acquired, accept the write-off.

Common RARC Pairings

The RARC code tells you exactly what triggered the CO-233:

How to Prevent CO-233

• Document all conditions present on admission thoroughly using POA indicators on every diagnosis code
• Implement rigorous infection control protocols (hand hygiene, sterile technique, catheter care bundles)
• Conduct comprehensive skin assessments at admission to document pre-existing pressure injuries
• Use surgical safety checklists and counting protocols to prevent retained foreign objects
• Train clinical documentation specialists to capture all pre-existing conditions during the admission process

General Prevention

• Implement rigorous infection control protocols including hand hygiene compliance, sterile technique, and proper catheter and central line management
• Ensure thorough and accurate documentation of all conditions present on admission using POA indicators on every diagnosis code
• Conduct comprehensive patient assessments at admission to identify and document all pre-existing conditions before treatment begins
• Train clinical staff on HAC prevention protocols and the financial implications of hospital-acquired conditions
• Establish quality improvement programs that track HAC rates and implement evidence-based prevention bundles
• Use EHR clinical decision support tools to flag potential HAC documentation issues before claims are submitted

Also Filed As

The same CARC 233 may appear with different Group Codes:

Related Denial Codes