Understanding Co-97 Denial Code: Common Causes And How To Fix Them

By Author: Albert
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In medical billing, claim denials pose major challenges for healthcare providers. Among them, the CO-97 denial code is particularly frequent and confusing. A denied claim halts revenue, increases administrative burden, and may put compliance at risk. For providers using denial management services, mastering CO-97 is crucial to maintaining healthy cash flow.
In this post, we’ll explain what CO-97 means, explore its common causes and impacts, and share best practices that leading denial management companies use to prevent and appeal these denials.
What Is the CO-97 Denial Code?
CO-97 is an adjustment or denial code used by payers indicating:
“The benefit for this service is included in the payment or allowance for another service/procedure that has already been adjudicated.”
In simpler terms, the insurer views the billed procedure as bundled into another service, meaning it’s not payable separately. Some typical scenarios:
Billing a procedure already covered in a surgical package

Submitting a secondary procedure that the payer considers inherent to a primary service

...
... Violating payer-specific bundling policies

Thus, CO-97 often reflects duplicate or unbundled billing, which payers deem already covered under another line item.
Common Causes of CO-97 Denials
By understanding what triggers CO-97, healthcare organizations and denial management services can implement prevention strategies. Key causes include:
Bundling errors
Many procedures fall under bundling edits (e.g., NCCI, CCE). If a provider bills a bundled service separately, CO-97 may be issued.

Duplicate billing
Submitting the same procedure multiple times (without valid modifiers) frequently leads to this denial.

Improper use of modifiers
Failure to apply modifiers like 59, 25, or 51 correctly to indicate distinct services can prompt bundling-related denials.

Weak documentation
If the clinical record doesn’t clearly support that two procedures were separate and necessary, payers may deny.

Payer-specific bundling rules
Each insurance payer may have unique bundling logic, and lack of awareness or failure to stay updated increases risk.

Financial and Operational Impact of CO-97 Denials
Even though CO-97 is a “routine” denial, its effects can cascade:
Revenue loss & cash flow disruption
Denials delay payments or lead to write-offs.

Higher operational costs
Staff may spend excessive time reworking claims, calling payers, and submitting appeals.

Compliance exposure
Repeated coding/bundling mistakes could be flagged as billing abuse.

Team and provider burnout
Accumulating denials frustrate clinicians and administrative teams.

Patient billing confusion
In some cases, patients may unexpectedly be billed when denials are passed on, reducing trust.

Reported estimates suggest 65–70% of claim denials are preventable, including many CO-97s. The right denial management company can make prevention and recovery far more efficient.
Best Practices to Prevent CO-97 Denials
Top denial management services routinely deploy these strategies:
Stay current with coding guidelines
Keep up with NCCI, CCE edits, payer bundling policies, and annual coding updates.

Use correct and specific modifiers
Incorporate modifiers like 25 (for a significant, separately identifiable E/M service) or 59 (distinct procedural service) when justified by documentation.

Strengthen clinical documentation
Documentation must clearly justify that services were separate, medically necessary, and distinct.

Pre-bill claim scrubbing
Automated tools can flag bundling conflicts and suggest corrections before submission.

Root cause analysis
Don’t simply resubmit. Investigate why CO-97 keeps occurring and adjust workflows accordingly.

Continuous staff training
Coders and billers must receive ongoing education on CPT, HCPCS, and payer policies.

Leverage denial management analytics
Advanced denial management platforms can detect recurring patterns (e.g. frequent CO-97s), generate dashboards, and recommend corrective actions.

When providers partner with a dedicated denial management company, they gain access to expertise, tools, and processes that reduce denials sustainably.
Appealing a CO-97 Denial
Even with precautions, CO-97 denials may sometimes be inappropriate. Here's how a denial management company typically handles appeals:
Review the EOB/RA
Identify the precise reason and relevant payer notes.

Reassess clinical documentation
Ensure the medical record justifies distinct services.

Correct and resubmit claims
Use appropriate modifiers or split lines if applicable.

Submit a formal appeal
Include supporting clinical notes, coding references, payer guidelines, and justification.

Track and escalate
If the claim is still denied, follow up at higher payer levels or request peer-to-peer review.

Timely and well-substantiated appeals often yield favorable outcomes for providers.
How a Denial Management Company Adds Value (Using CO-97 as an Example)
A specialized denial management company (or a full-service RCM firm with denial management services) brings structured processes and deep expertise to fight CO-97 and other denials. Here’s how:
Trend analysis & reporting
Identifies recurring CO-97 patterns across specialties, payers, or providers.

Corrective workflows
Implements standardized coding checks, modifier logic, and bundling checks.

Claim scrubbing systems
Integrates denial management tools that auto-flag CO-97 risk before submission.

Appeal management protocols
Maintains proven templates, payer-specific scripts, and escalation paths.

Ongoing training & compliance oversight
Keeps internal teams up-to-date on coding changes, payer rules, and regulatory shifts.

By outsourcing to a trusted denial management company, providers reduce denials, reclaim lost revenue, and minimize internal administrative burden.
Conclusion
CO-97 is one of the trickier denial codes, often tied to bundling or duplicate billing issues. But with proactive strategies—accurate coding, strong documentation, pre-bill scrubbing, root cause analysis—and leveraging expert denial management services, many of these denials can be prevented or successfully appealed.

Read more: https://www.allzonems.com/co-97-denial-code-guide/