Why did they reject your claim this time? Denial code 15? Don’t know what it is? Or maybe you know what it means but are unsure if you can reverse it. Relax. Whatever your concerns may be regarding the CO 15 denial code, we have you covered.
In this guide, we will analyze the CO 15 denial code’s description, reasons, prevention techniques, and resolution steps so you can reclaim your seemingly lost revenue.
CO 15 Denial Code – Description
Denial code 15 is a Claim Adjustment Reason Code (CARC) that the insurance payer sends to the healthcare provider to explain that the authorization number on the claim form is either incorrect, invalid, or missing. Hence, the medical claim was denied.
The CO 15 denial code is represented with the Group Code ‘CO’ to inform the provider that a breach of ‘contractual obligation’ was the main reason for the denial. It means that even though the contract terms explicitly mention the payer’s billing guidelines and reimbursement policies, such as entering the correct authorization number for a pre-authorized service or procedure, the provider failed to comply with the agreed-upon terms.
The good news is that CO 15 is a soft denial and can be reversed once you rectify the error and resubmit the claim.
Common Causes of CO 15 Denial Code
CO 15 is one of the most common denial codes in medical billing. It highlights the importance of seeking prior approval for specialized services and procedures and the consequences of not entering the correct authorization number.
In the past, studies have shown that nearly 8% of medical claims are denied because of the lack of prior authorization. Now that we know how significant prior authorization, pre-certification, or pre-authorization is to the medical billing process and the attainment of reimbursements, let’s understand what it is.
Prior authorization is the process of seeking approval from the patient’s insurance company before rendering costly and specialized medical services like diagnostic tests, surgeries, drugs, and equipment. The healthcare provider explains the medical necessity of such services and procedures, and the insurance payer authorizes them to confirm their coverage and resulting reimbursements.
Let’s understand a few other reasons besides the lack of pre-authorization that trigger the CO 15 denial code.
Incorrect or Outdated Authorization Number
As per X12.org’s complete list of CARCs, denial code 15 occurs because of a missing, invalid, or non-applicable authorization number for the billed service or procedure. The payer’s automated claims processing system may also flag this denial code if the entered authorization number is incorrect.
For example, a CO 15 denial code will be triggered if the medical coding and billing staff makes a typing error while entering the authorization number in block number 23 on the CMS-1500 claim form. Similarly, if the biller enters an expired authorization number (meaning the services were rendered after the authorization expired) or an invalid one (the authorization number is not for the service, date, and provider mentioned on the claim form), again, a CO 15 denial code will be flagged.
Lack of Prior Authorization
As discussed above, failure to obtain prior authorization is the primary reason for CO 15 denial code. The provider-payer contract usually lists the services and supplies that require pre-authorization, e.g., diagnostic imaging, durable medical equipment (DME), and planned surgeries.
When providers file a claim for a service that mandated pre-authorization, but they did not seek prior approval and went ahead with the service without one, leaving the field blank for an authorization number, the payer triggers denial code 15 to highlight this mistake.
Incomplete Documentation
Payers assess the medical necessity of a service or procedure through supporting documentation like the patient’s complete medical history, test results, and referral letters.
However, in the case of denial code 15, another important document must be submitted with the claim form – the prior authorization letter. Note that if any of these documents are missing or incorrect, the payer will deny your claim with a CO 15 denial code as they cannot see why the service, procedure, or product was medically necessary for the insured patient.
Miscommunication Between the Provider and Payer
You must have heard that miscommunication is the root cause of relationship breakdowns. Healthcare providers and insurance payers are in a professional relationship and must maintain effective communication to strengthen the bond.
However, the CO 15 denial code is flagged when there is miscommunication between the provider and the payer concerning pre-authorization. For example, the payer may have approved a planned surgery and issued a pre-authorization letter but failed to understand why the payer requested an extension of the authorization number’s validity. Because of this, the authorization number expired before the surgery was performed, and the claim was denied due to an outdated (invalid) authorization number.
In a Healthcare Finance news report, it was found that private insurance payers initially deny 15% of medical claims, and out of this, 3.2% are for the services that were pre-approved through a meticulous pre-authorization process.
Data Discrepancy in Authorization Letter and Medical Claim
Imagine requesting prior authorization for hip replacement surgery and submitting a medical claim for gait training. Confusing, right? Insurance payers feel the same way when the information in the authorization letter does not match the data on the medical claim form.
It can happen due to coding mistakes, discrepancies in the date of service, or incorrect patient/provider information. Whatever the underlying reason for the mismatch may be, the result is a BIG and bold denial code 15!
How to Prevent Denial Code CO 15?
Prevention is Better than Cure Rework, Resubmission, and Appeals! Why even get into the hassle of costly reworks and tedious appeals process when you can prevent the CO 15 denial code in the first place? That’s right! It is possible to nip the evil in the bud. Simply follow these prevention techniques we have compiled below to keep denial code 15 at bay.
Leverage Claim Scrubbing Tools
Use automated claim scrubbing tools to detect errors in completed claims forms. Typing errors, missing fields, and incorrect codes are some of the mistakes that claim scrubbing tools can identify and highlight. Run your electronic claims form through scrubbing software for review to ensure the authorization number is correct, complete, valid, and in field 23. Rectify all detected mistakes to avoid the CO 15 denial code.
Cross-Check Authorization Details
Review the pre-authorization letter to verify the authorization details, such as the service date, type of service, operating/performing physician’s name, and place of service. It will help you avoid discrepancies in the authorization letter and the submitted claim form. Moreover, tallying the information on the documents will help you confirm if the authorization number is correct and valid, preventing denial code 15.
Ensure Vigilance While Filling Claim Form
Like all the other steps in medical billing, claim processing and submission requires attention to detail. You must carefully fill out all the relevant fields on the CMS-1500 form and pay close attention to Block 23 to ensure the correct entry of the authorization number. A little vigilance can save you from denial code 15 and its exorbitant rework charges.
Image Source: CMS
Obtain Pre-Authorizations When Needed
Don’t skip the prior authorization process, even if it delays patient care. If the contract terms clearly state that you will need prior approval from the payer for the service you are about to render to your patient, then stop right there, go to the payer’s website, and submit an application for pre-certification. You can take the help of third-party medical billing companies to fast-track the process, obtain a go-ahead, and file a clean claim with the accurate authorization number to mitigate the CO 15 denial code.
Update Patient Records
You must also regularly update your patient’s records to avoid entering outdated authorization numbers on the claim form. Denial code 15 may occur if you mistakenly enter an old and expired authorization number for a previously performed procedure in a claim form for a new billable service. So, to avoid this confusion, update the patient records and adopt effective organization techniques to keep new and relevant information at hand.
Train Your Staff on Revised Payer Guidelines
Insurance payers frequently revise their billing guidelines and reimbursement policies. Failure to keep track of these changes can land you, head first, in denial code 15! It could be that you filed a claim for a service that previously did not need prior authorization.
However, the payer’s rules were revised, and now, that procedure requires pre-authorization. You and your staff performed the procedure and submitted a claim without checking the new guidelines, only to receive a CO 15 denial code. In this case, you could have prevented the denial if you had stayed abreast with the changing payer guidelines and advised your staff to do the same.
Maintain Complete Documentation
Last, but not the least, ensure that you keep a complete record of all the important documents you will submit as supporting evidence with the claim form, including the prior authorization letter. It will remind the insurance payer that they had previously approved the service, acknowledged its medical necessity, and were willing to reimburse it.
How to Resolve Denial Code CO 15?
But what can you do if the payer has denied your claim with code 15? Can you still collect your payment, or is it lost forever? Remember, we said earlier that CO 15 is a soft denial and can be reversed if you do the work? Well, now is the time to unfurl those tips and tricks and help you manage the CO 15 denial code. Take a look.
Review the Denial Letter
Before you do anything else, read and re-read the letter that is causing you so much pain. Why do we say this? Most often, the solution lies in the problem. So, start with thoroughly reading the denial letter and understanding what code 15 is referring to. The CARC CO 15 denial code is pointing towards an incorrect, missing, or invalid authorization number. That is the root cause of your claim denial and exactly where you should begin your reversal journey.
Verify Authorization Details
Now that you know the reason for the denial, the next step should be to identify what went wrong. Review the pre-authorization letter to verify the authorization number and details (approved service, date of service, provider and patient names, etc.). Cross-check this information with what you had entered in the claim form to see if you made a mistake.
Re-Check the Pre-Authorization Requirements
You must also re-read the payer contract to confirm if a pre-authorization was required for the billed service or procedure. If yes, read through the requirements to see if you followed them to a T.
Rectify the Errors
If the CO 15 denial code occurred because of a typing mistake in the authorization number, fix this error to resubmit the claim. However, if the denial was caused due to the lack of pre-authorization, you will have to follow the payer’s process to apply for prior authorization. You can rework the claim only after you have obtained a valid authorization number.
Resubmit the Claim
Now that everything is in order and all the errors have been fixed, resubmit the claim to reverse denial code 15 and secure your reimbursement.
Appeal (If Necessary)
However, if you followed all the steps mentioned above and could not find the mistake on your end, there is a chance that the payer’s automated claims processing system triggered a false denial. In this case, you can fight the CO 15 denial code by appealing it. Follow the payer’s appeal process to submit an application and supporting documents. It will make your case strong.
Follow-Up and Report
Don’t forget to track the status of your claim. Stay in constant communication with the insurance payer to monitor the progress of your revised claim or appeal. Moreover, you should show willingness to submit any additional documents that the payer may need to backtrack denial code 15.
Finally, you must prepare a comprehensive report on the denial code, its reasons, and its resolution to identify loopholes in your billing workflow and formulate preventative strategies. This unofficial internal audit will help you reduce denials and improve the financial performance of your practice.
Bottom Line
Denial code CO 15 is one of the most commonly occurring denials in insurance billing. Minor typing errors and blunders in authorization verification can trigger this denial. However, with proactive steps, preventative techniques, and effective rework, you can mitigate and manage denial code 15, keeping your revenue from slipping away.
Don’t want to do the work, that’s also okay. You can outsource denial management to MediBill MD at affordable rates and enjoy a 98% clean claim rate, a 96% collection ratio, and up to 15% revenue boost without diverting your attention from quality patient care.
