CO-97: Bundled Service — Not Paid Separately

What Does CO-97 Mean?

CO-97 is a contractual adjustment indicating the payer considers the billed service already included in the reimbursement for another procedure. Under the provider's contract with the payer, this bundled amount must be written off — the patient cannot be billed for it. The denial is typically driven by NCCI Column 1/Column 2 edits, payer-specific bundling rules, or global surgical period policies. CO is the expected Group Code for CARC 97 in the vast majority of cases.

CARC 97 fires when a payer's adjudication system identifies that a billed service is considered a component of another procedure already being paid on the same claim or within a global surgical period. The payer applies bundling logic — most commonly the CMS National Correct Coding Initiative (NCCI) Column 1/Column 2 edits — to determine that the two codes cannot be billed separately. The Column 2 code (the less comprehensive service) is denied, and only the Column 1 code (the more comprehensive service) is reimbursed.

This denial is not always an error. Many CARC 97 denials are correct: the billed service genuinely is an inherent part of the primary procedure. Specimen collection during an office visit, simple wound closure during a surgical procedure, and post-operative E/M visits within the global period are all legitimately bundled. The key question is whether the denied service was truly distinct and independently performed, or whether it was a component of the paid procedure.

The financial outcome depends on the Group Code. CO-97 is far more common and represents a contractual write-off — the provider absorbs the denied amount and cannot bill the patient. PR-97 is less frequent and shifts the bundled amount to the patient, typically when the patient's benefit plan design treats the denied component as a non-covered service. Always verify the Group Code assignment is correct before taking action, particularly for PR-97 where incorrect assignment could result in improper patient billing.

Common Causes

How to Resolve

Determine whether the bundling is correct by checking the NCCI modifier indicator, then either write off, resubmit with modifiers, or appeal based on the findings.

1. Identify the bundling trigger Read the RARC code on the remittance to determine whether the denial was triggered by NCCI edits (M15), global surgical period rules (N770), comprehensive/component logic (N372), or E/M bundling (N120).
2. Check the NCCI modifier indicator Look up the Column 1/Column 2 code pair in the current NCCI table. If the modifier indicator is 0, the service cannot be unbundled under any circumstance. If the indicator is 1, separation is permitted with proper documentation and modifier use.
3. Write off if bundling is correct When the modifier indicator is 0, or when clinical documentation confirms the service was truly a component of the primary procedure, post the CO-97 adjustment as a contractual write-off. No further action is needed.
4. Resubmit with modifier if service was distinct When the modifier indicator is 1 and documentation supports that the service was separately performed, resubmit with modifier 59 or the most specific X-modifier (XE for separate encounter, XS for separate structure, XP for separate practitioner, XU for unusual non-overlapping service). Attach supporting documentation.
5. Handle global period denials For E/M visits denied during a 10-day or 90-day global surgical period, determine if the visit was for an unrelated condition. If so, resubmit with modifier 24 and documentation of the separate diagnosis. For unrelated procedures, use modifier 79.
6. File a formal appeal when warranted Appeal when the bundling determination conflicts with NCCI rules, when payer contract language permits separate billing, or when proprietary payer edits are more restrictive than NCCI. Include operative notes, separate diagnoses, modifier indicator references, and the relevant contract provisions.

Common RARC Pairings

The RARC code tells you exactly what triggered the CO-97:

How to Prevent CO-97

• Run every claim through NCCI Column 1/Column 2 edit checks before submission — edits update quarterly, so maintain current tables
• Build payer-specific edit libraries for high-volume code pairs and load them into your claim scrubbing software
• Flag all accounts within 10-day or 90-day global surgical windows at the scheduling stage so billers are alerted before claim generation
• Create modifier reference guides by specialty that define exactly when to use modifiers 24, 25, 59, XE, XS, XP, and XU, along with the documentation each requires
• Train providers to document the distinctness of separately performed services in operative and progress notes — payers will not accept a modifier without supporting documentation
• Track CO-97 denial rates monthly by payer, provider, and procedure code to identify systemic bundling issues before they accumulate
• Before billing component services separately, confirm the service was independently performed, clinically distinct, and documented as such in the medical record
• Maintain an internal watch list of procedure pairs that frequently trigger CO-97 denials by specialty and payer

General Prevention

• Check NCCI edits before claim submission for every code pair billed on the same date of service — edits update quarterly, so use the current version
• Build payer-specific edit sets for high-volume code pairs and apply them in claim scrubbing software before submission
• Flag accounts within global surgery windows (10 or 90 days) at the scheduling stage to alert billers before claims are generated
• Develop modifier playbooks by specialty defining exactly when to use modifiers 24, 25, 59, and X-variants (XE, XS, XP, XU), with documentation requirements for each
• Coach providers to explicitly document unrelated problems and distinct services in operative and progress notes — modifiers alone won't save claims without supporting documentation
• Track CO-97 denial patterns monthly by payer, provider, and procedure code to identify systemic issues rather than addressing individual denials reactively
• Before separately coding procedures, verify the service is independently performed, unrelated to the major procedure, and performed on a contralateral/ipsilateral site with different incision/orifice
• Maintain an internal reference list of services that historically trigger CO-97 denials by specialty and payer

Also Filed As

The same CARC 97 may appear with different Group Codes:

Related Denial Codes