Understanding the alphanumeric denial codes is your key to contesting the rejected reimbursement.
In today’s guide, we will decode the CO 167 denial code and help you comprehend why a payer triggers it, what can be done to prevent it, and how you can reverse it.
So, brace yourself as we navigate the maze of complicated code sets to defeat denial 167.
CO 167 Denial Code – Description
Insurance payers flag a medical claim with the denial code 167 when the diagnosis or diagnoses are not covered under the stated plan.
Denial 167 is one of the most frequently triggered Claim Adjustment Reason Codes (CARC) in healthcare billing. It indicates that the government or private insurance payer has denied the payment for the rendered services due to an uncovered diagnosis(es).
Common Causes of CO 167 Denial Code
Although it may seem that the reason for denial code 167 is self-explanatory, many underlying reasons and oversights eventually result in a CO 167 denial code.
Therefore, you must be aware of all the minor errors, discrepancies, and simple negligence that could compel a payer to reject your claim with CARC 167.
Uncovered Diagnosis
Medical insurance plans have several types and levels to ensure that the healthcare providers and insurance payers meet the unique needs of patients from all walks of life.
For example, the health insurance plans are categorized into:
- Exclusive Provider Organization (EPO)
- Health Maintenance Organization (HMO)
- Point of Service (POS)
- Preferred Provider Organization (PPO)
In each of these categories, patients can opt for one of the four metal tiers – Bronze, Silver, Gold, or Platinum. However, depending on the chosen plan, there will be some limitations and exclusions regarding the covered procedures and diagnoses.
So, when a healthcare provider lists an uncovered diagnosis in the medical claim, the payer refuses reimbursement for it with the denial code 167.
Incorrect Coding
Inaccurate medical coding plays an integral role in claim denials. In a survey conducted by Experian Health, 42% of the denials were caused by coding inaccuracies.
Insurance payers tag your claims with the CO 167 denial code when the diagnosis codes are incorrect, incomplete, or outdated. Their automated claims processing systems cannot recognize the entered diagnosis codes and flag them under uncovered services.
Insufficient Documentation
Another reason for the denial code 167 is the lack of documentation to prove the medical necessity for the diagnosis.
If a medical service was provided to diagnose a serious condition, the practitioner must submit a ‘Letter of Medical Necessity’ along with the claim. It should be able to prove that the rendered service was not experimental, investigational, or cosmetic.
Changes in Payers’ Policy
Medical insurance payers update their policies from time to time. It is possible that you coded and billed a diagnosis that was previously covered by the payer but will no longer be reimbursed under the new rules and guidelines.
Failure to Obtain Pre-Authorization
Healthcare providers must obtain prior authorization or approval from insurance payers before providing medical services to their patients. The one-step verification process ensures that the rendered service is medically necessary and will be covered by the payer.
However, if the provider skips this step and performs the diagnosis without precertification, it is hard to ascertain if the service is covered under the patient’s insurance plan, resulting in a possible denial code 167.
Preventive Strategies for Denial Code CO 167
You can nip the CO 167 denial code in the bud. Consider the following preventive strategies to reduce the risk of denial 167 and maintain a steady cash flow for your healthcare practice.
Verify Insurance Coverage
The first proactive measure to mitigate denial code 167 is to verify the patient’s eligibility and benefits. It will help you confirm the diagnoses and procedures that are covered under the patient’s insurance plan.
Outsource Medical Coding
Medical coding is complex, especially when the code sets are updated annually. Minor errors while coding the diagnosis can flag it as an ‘uncovered diagnosis’ leading to the CO 167 denial code.
You can outsource diagnosis coding to a professional medical billing company to avoid this issue. Their certified professional coders (CPCs) know the latest ICD-10-CM guidelines and can accurately code every diagnosis on your claim.
Maintain Complete Documentation
Healthcare practices should maintain complete and accurate health records. The patient’s diagnosis and treatment should be systematically and precisely recorded and submitted with the claims as evidence to support medical necessity.
Keep Up with Changing Policies
You must regularly review the payers’ policies to ensure compliance and avoid denial code 167. Check the payer’s contract, terms and conditions, and the list of covered and uncovered medical services to confirm if you will get a reimbursement.
Get Payers’ Approval
When in doubt, get a pre-authorization from the insurance payer for the diagnosis you intend to perform.
Getting the payer’s approval beforehand ensures payment since you will have a written document to prove that the payer acknowledged the service as safe, medically necessary, and cost-effective for the patient.
CO 167 Denial Code – Management & Resolution
If you were unable to prevent the CO 167 denial code, rest assured that all is not lost. You can still overturn the decision and get your reimbursement by following these steps.
Review Medical Records
Re-examine your patient’s medical record to check if there were any errors or inconsistencies in the diagnosis codes.
Verify Patient’s Insurance Coverage
You must also confirm the patient’s insurance coverage to see if the diagnoses were indeed uncovered by the payer. You can do this by browsing the payer’s website, reading their contracts, or contacting customer service.
Rework or Appeal
If the denial was due to an error on your part, such as incorrect coding, incomplete documentation, or billing for an uncovered diagnosis, then you must rework the claim to rectify the errors and resubmit it for payment collection.
However, if the denial was unjust, you can appeal it by submitting the necessary paperwork.
Follow Up
While waiting for the reversal of denial code 167, be sure to track the progress of your appeal. Most payers complete the internal review within 72 hours and notify you of their verdict.
So, if it has been more than 3 business days and you are still waiting for a decision, you can call the payer’s helpline number and inquire about the status of your appeal.
Bottom Line
A Change Healthcare infographic reveals that 65% of denials are never reworked. Don’t leave money on the table, especially when there are multiple ways to overturn the CO 167 denial code.
Explore our proven healthcare denial management solutions to fight CO 167 and get the reimbursement you are entitled to.
