Is a high claim denial rate stopping your practice from embracing the financial success it deserves? Are you worried that if you don’t take action soon, you might have to lay off staff or close your practice doors? BUT! Why go to this extreme when you can understand different denial codes, work towards their successful resolution, and prevent them in the future?
This guide on the CO 234 denial code offers all this! We will discuss the possible reasons that led to this denial and some preventive strategies. Swe will also share a step-by-step approach to resolving this CO denial.
CO 234 Denial Code – Description
Insurance payers return claims with denial code CO 234 when the billed procedure or service is not eligible for separate reimbursements. This denial code falls under the contractual obligation (CO) category, which identifies the legally binding responsibilities between the payer, provider, and patient.
If you receive a 234 code on a denied claim, it indicates that the payer considers the billed procedure as part of another service and must be billed in its respective bundle.
Common Causes of CO 234 Denial Code
Here are the main reasons that result in this denial code:
Improper Grouping of Procedures
You may trigger denial code 234 when you group the billed procedure incorrectly with another care service (bundling) or have not itemized your performed procedures individually.
Coding Inaccuracies
Coding error is another cause of the CO 234 denial code. These may include utilizing outdated or deleted CPT codes, misaligned diagnosis and procedural codes, or failure to ensure coding specificity during the selection of the CPT code.
Lack of Medical Necessity
If the insurance payer deems the rendered care procedures medically unnecessary or inappropriate, they may deny the claim with denial code CO 234. This typically happens when the billed procedure doesn’t align with the diagnosis or better treatment options are available.
Insufficient Documentation
You can say this issue is somehow connected with reason no. 3 as inadequate documentation, such as missing test results or clinical notes, makes it challenging to establish medical necessity for the billed procedure.
Besides, some other documentation errors that may lead to denial code 234 include missing patient demographics, patient medical history, expired provider certification or enrollment, etc.
Uncovered Services
If you bill services that are either not a part of the insurance plan, excluded services, or non-reimbursable items, it may also trigger the CO 234 denial code.
Prior Authorization Issue
Some medical procedures require prior authorization from the payer. If you fail to obtain it before rendering the services, or your claim does not contain the authorization number, it may also lead to denial code CO 234.
Not Meeting Filing Deadlines
Another reason for denial code 234 is the failure to submit the claim within the filing deadline.
Denial Code 234 – Prevention
Discussed below are some of the mitigation strategies for denial code CO 234:
Comply with Bundling Rules
Different insurance companies have varying reimbursement guidelines and service bundle rules. Thus, you should always strive to familiarize yourself with specific payer requirements and determine which services are separately payable and what procedures must be billed together.
Besides, note that there are some services that payers consider inclusive. Therefore, acquire as much intel on the guidelines as possible before creating and submitting a claim to avoid bundling-related issues and the CO 234 denial code.
Ensure Documentation Completeness
Comprehensive documentation is key to avoiding many denials, including the denial code 234. Therefore, we recommend comprehensively documenting every detail about the rendered care procedures. These may include diagnosis reports, clinical notes, proposed treatment plans, establishing the medical necessity of procedures, explaining how the provider performed the procedure, and complications.
Utilize Appropriate Modifiers and Accurate Codes
It is recommended to limit your use of non-specific codes if any other procedural code fails to define the rendered procedure. We understand that care is often tailored to the individual patient’s needs. Besides, sometimes, unforeseen complications occur that may lead to added complexity or time.
If such situations arise, modifiers can help you ensure coding accuracy and specificity, ultimately mitigating the risk of denial code CO 234. Moreover, it is always a great idea to double-check diagnosis and procedural codes for added protection against denials.
Conduct Regular Internal Audits
Conducting regular internal audits is another preventive strategy to help you identify the denial trends and find the root cause behind most of the issues. If your claims frequently trigger denials, including denial code 234, then chances are your medical billing and coding workflow is erroneous.
Based on the findings, you can design training sessions for your billing team to help them stay current on different coding systems, payer requirements, regulatory standards, and billing best practices.
Denial Code 234 – Resolution
The preventive strategies will help you avoid the CO 234 denial code. However, if it is triggered, here’s how you should work towards its successful resolution and speedy reimbursement:
- The first step should be to review the claim carefully to determine whether the billed procedure is appropriately bundled with other services and ensure it is not billed separately.
- Check the claim for the Remark Code, and verify that it is the Remittance Advice Remark Code (without the ALERT) or the NCPDP Reject Reason Code for further insight into the denial reason.
- Double-check your claim for coding accuracy and specificity.
- Ensure your claim adheres to the specific payer guidelines related to billing and reimbursement.
- If you are confident that the procedure should be billed separately, provide supporting documentation to justify it and appeal the claim.
- Promptly follow up on the status of your appealed claim and keep a record of all the communication with the payer to avoid future issues.
How MediBillMD Can Help Resolve Denial Code 234?
At MediBillMD, we have an experienced team of certified professional coders (CPCs) and billing specialists. Our team understands which services are eligible for separate payment and which procedures should be bundled together. As a result, when you outsource medical billing services to us, you are assured that it won’t be returned with a CO 234 denial code.
Besides, our team strives to ensure coding specificity, appropriate modifier usage, documentation completeness, and compliance with regulatory standards, such as HIPAA, so our partnered practices thrive with a higher claim first-pass rate. Moreover, we provide denial management services to practices struggling with denial resolution.
