CO-274: Fee/Service Not Payable — Care Coordination Arrangement

What Does CO-274 Mean?

CO-274 means the provider bears the financial responsibility for this denial. The payer has determined that the service is not payable under the care coordination arrangement, and the patient cannot be billed for the denied amount. The provider must either absorb the cost, correct a billing error and resubmit, or successfully appeal the denial.

CARC 274 fires when a payer determines that the billed fee or service is not payable under the patient's care coordination arrangement. These arrangements — common in ACOs, bundled payment programs, and managed care plans — define specific parameters for covered services, and any service falling outside those parameters triggers this denial.

The root cause is almost always a disconnect between what was billed and what the care coordination agreement actually covers. This can be a genuine coverage exclusion, an expired or missing authorization specific to the arrangement, a service that exceeds frequency limits, or simply a coding error that made a covered service look like a non-covered one. In bundled payment scenarios, the service may already be included in a global fee, making separate billing inappropriate.

Unlike more common denial codes, CARC 274 requires you to understand the specific terms of the patient's care coordination arrangement — not just the standard insurance plan. This means resolution often involves reviewing arrangement-specific documentation rather than standard payer policies.

Common Causes

How to Resolve

Review the care coordination arrangement terms, identify why the service was excluded, and either correct the claim or appeal with supporting documentation.

1. Review the arrangement agreement Examine the care coordination arrangement to understand exactly which services are covered and what authorizations are required.
2. Verify coding accuracy Ensure procedure and diagnosis codes correctly represent the service — coding errors are a common cause of CO-274 when the service itself is actually covered.
3. Contact care coordination team Call the payer's care coordination unit to clarify the denial reason and ask what documentation would support coverage.
4. Correct and resubmit if coding error If the denial resulted from incorrect codes, fix them in your billing system and resubmit as a corrected claim.
5. Appeal if service is covered If the service should be covered, file a formal appeal with the arrangement agreement, clinical records, and medical necessity documentation. Submit within the payer's appeal deadline.

How to Prevent CO-274

• Verify the patient's care coordination arrangement coverage before providing services, checking for exclusions and authorization requirements
• Obtain pre-authorization for any services that require advance approval under the arrangement
• Train billing staff on the specific terms and limitations of each care coordination arrangement your practice participates in
• Monitor CARC 274 denial trends to identify systemic issues with specific arrangements or service types

General Prevention

• Verify patient eligibility and care coordination arrangement coverage before providing services
• Obtain prior authorization for services that require advance approval under the care coordination arrangement
• Maintain thorough documentation of all care coordination activities and covered services
• Train staff on the specific requirements and limitations of care coordination arrangements
• Monitor claim patterns to identify recurring denials and address root causes proactively
• Stay informed about changes to care coordination agreement terms and policies

Also Filed As

The same CARC 274 may appear with different Group Codes:

Related Denial Codes