CO-96: Non-Covered Charges

What Does CO-96 Mean?

CO-96 assigns the non-covered charge to the provider as a contractual write-off. The payer is telling you that the service is not covered under the patient's plan, and under your contract, you cannot bill the patient for this amount. The one exception: if you obtained a signed Advance Beneficiary Notice (ABN) before the service, you may be able to reclassify the charge as patient responsibility. Without an ABN, particularly on Medicare claims, the provider must absorb the cost. You also cannot appeal CO-96 on the basis of medical necessity alone if the service is explicitly excluded from the plan.

CARC 96 is the payer's way of communicating that one or more charges on your claim fall outside the patient's coverage. This is a coverage-based denial, not a billing error or medical necessity dispute — although coding errors can trigger it when a covered service is submitted with the wrong code and gets reclassified as non-covered. The X12 standard requires at least one Remark Code to accompany CARC 96, so always check the RARC before taking any action.

The scope of non-covered charges is broad. It includes services explicitly excluded by the plan (cosmetic procedures, experimental treatments, alternative therapies), services that exceeded a plan-imposed limit (such as a cap on physical therapy visits per year), services from out-of-network providers without proper authorization, and services rendered after coverage has lapsed or been terminated. A service that is normally covered can also be adjudicated as non-covered if the submitted code set contains an excluded procedure code, a missing modifier, or an unsupported diagnosis.

The group code pairing is especially important with CARC 96. CO-96 assigns the non-covered charge to the provider as a contractual write-off — which means you cannot bill the patient unless you obtained an Advance Beneficiary Notice (ABN) before the service. Without a signed ABN on Medicare claims, the provider absorbs the cost entirely. PR-96 means the patient accepted financial responsibility, typically because they were informed the service was not covered and chose to proceed. Understanding this distinction is critical for correct financial posting and patient billing.

Common Causes

How to Resolve

Read the RARC to identify the specific reason for non-coverage, then either correct and resubmit, write off, or bill the patient based on the group code.

1. Determine if the service is truly non-covered Review the RARC, the plan's benefit details, and the submitted codes. If the service should be covered but was coded incorrectly, the fix is coding correction — not an appeal.
2. Check for a signed ABN If the service was known to be non-covered before delivery, verify whether an ABN was signed. If so, contact the payer to reclassify the charge from CO to PR so you can bill the patient.
3. Correct coding errors and resubmit If the wrong procedure code, missing modifier, or unsupported diagnosis caused the non-coverage determination, correct the claim and resubmit with documentation supporting the correct code.
4. Post the contractual write-off If the service is genuinely non-covered and no ABN exists, post the CO-96 amount as a contractual adjustment. Do not bill the patient.

Common RARC Pairings

The RARC code tells you exactly what triggered the CO-96:

How to Prevent CO-96

• Verify insurance coverage details and plan exclusions before rendering services, especially for elective or non-standard procedures
• Obtain a signed ABN from the patient before providing any service that may not be covered, particularly for Medicare patients
• Review payer-specific coding guidelines regularly to ensure procedure codes and modifiers meet coverage criteria
• Maintain a reference list of commonly non-covered services by payer and train staff to flag these for benefit verification

General Prevention

• Verify insurance coverage and specific benefit details for every service before rendering care, checking for plan exclusions and coverage limits
• Obtain an Advance Beneficiary Notice (ABN) from the patient before providing any service that may not be covered, particularly for Medicare patients
• Review payer-specific coding guidelines regularly to ensure procedure codes, modifiers, and diagnosis codes meet coverage criteria
• Check the patient's remaining benefits for services with annual or lifetime limits before scheduling appointments
• Maintain a reference list of commonly non-covered services by payer and train scheduling staff to flag these services for benefit verification
• Conduct regular coding audits to catch incorrect codes or missing modifiers that cause covered services to be adjudicated as non-covered

Also Filed As

The same CARC 96 may appear with different Group Codes:

Related Denial Codes