Payers deny medical claims for many reasons. But how many of your claims are rejected due to non-covered services? You are not alone, as this is one of the most recurring problems faced by healthcare providers. Insurers use the CO 50 denial code to flag such claims. However, there is one problem!
Non-covered services can mean anything, from routine procedures to those that fall outside the patient’s insurance coverage. So, what exactly does the denial code 50 indicate, and is it avoidable? If you are confused like many others, then you are at the right place. Let’s explore the specifics of this denial code, including its common triggers and how you can effectively avoid or resolve this problem.
CO 50 Denial Code – Description
Did you know that CO 50 is the 5th most common denial code used by Medicare this year? But what exactly is it? This insurance denial code defines services usually not covered under the patient’s current insurance plan for one simple reason – they are not medically necessary.
In simple words, insurance companies use CO 50 denial code to deny services that are not essential for a patient’s treatment based on their guidelines. These are usually experimental, investigational, or cosmetic procedures such as rhinoplasty.
Reasons for CO 50 Denial Code
Even one claim denial can lead to significant financial losses. So, we can imagine your frustration of continuously facing CO 50 denials due to coverage confusion. The ideal way forward is to prevent these denials altogether! You can do that by understanding the primary causes behind the CO 50 denial code. Here are three main reasons why insurance companies deny most claims with this code.
Medically Unnecessary Service
The primary reason behind CO 50 denial code is that most services do not meet the medical necessity criteria. This is usually defined in the benefit plan’s medical policy. Insurers evaluate the patient’s medical condition, the effectiveness and cost of the service, and whether the performed procedure falls within the accepted medical standards to determine its medical necessity.
If they find that the service is merely for the patient’s convenience or is unrelated to their condition, they deny your claim with the CO 50 denial code.
Incorrect Diagnosis Code
This is a common mistake. Your diagnosis code (ICD-10-CM code) should justify the medical necessity of the provided service or treatment. Otherwise, insurance companies will deny your claim with the CO 50 denial code.
Failure to Meet LCD/NCD Guidelines
Medicare defines its coverage policies through the National Coverage Determination (NCD). In the absence of an NCD, a local Medicare Administrative Contractor (MAC) uses Local Coverage Determinations (LCD) to assess whether the provided services meet Medicare’s coverage requirements.
Both LCD and NCD define medically necessary services. Payers deny medical claims with the CO 50 denial code if healthcare providers fail to meet these guidelines.
How to Prevent Denial Code CO 50?
Instead of dealing with the aftermath, it is better to avoid the CO 50 denial code altogether. Proactive denial prevention is the key to improving operational efficiency. Want to receive timely payments? Simply take the following steps.
Verify Insurance Coverage
Every insurance plan is unique, covering different physicians, prescriptions, and services. Therefore, the best way to avoid the CO 50 denial code is to verify each patient’s insurance eligibility before providing any medical treatment to them. This will help you differentiate between covered and non-covered services.
Review Payer-Specific Requirements
Another ideal way to avoid this denial is by keeping up with each payer’s policies. Review their guidelines to familiarize yourself with their medical necessity requirements. In the case of Medicare, go through NCD or LCD, depending on your area, to determine the coverage.
Keep in mind that insurance companies frequently change their demands. So, keep an eye on these changes.
Maintain Proper Records
To avoid denial code 50, you should justify the medical necessity of services through proper documentation. Hence, you should maintain complete and legible records for every patient. This includes recording their medical history, current symptoms, diagnosis, and other relevant details that can prove the necessity of the provided treatment.
Apply Correct Diagnosis Codes
Improve your coding accuracy so you can apply the correct diagnosis code. This will help you describe the patient’s condition, which, in turn, will defend the medical necessity of the specific service.
In simple words, an accurate diagnosis code will provide the clinical reasoning behind the performed treatment, helping you avoid CO 50 denial code.
Correspond With Payers
If you are uncertain about some coverage requirements, communicate with the payers to steer clear of common mistakes. These interactions will help you gain a better understanding of their medical necessity policies.
Educate Your Staff
Your staff should know each insurance company’s criteria for determining medical necessity. Conduct frequent sessions to educate your billing team on their specific requirements and provide regular updates on frequent changes.
How to Resolve Denial Code 50?
The steps for addressing denial code 50 are simple but unique. If your claim was denied with this code, you have to send it for redetermination instead of a simple resubmission. Before moving to the resolution steps, let us clarify what exactly redetermination is. It is simply a claim review by a different medical claim specialist who was not part of the initial evaluation. With that being said, here is how you can effectively resolve this denial code.
Determine the Reason for Denial
Check your denied claim and read the Explanation of Benefits (EOB) to understand the reason for your CO 50 denial code. Also, check the Remittance Advice. If it includes the MA130 message, it means your claim had some missing information. In this case, correct the claim and resubmit it.
Verify the Insurer’s Policy
Next, review the specific payer’s guidelines to see if you overlooked a particular detail about their medical necessity requirements. You can typically find this information on their website. In Medicare’s case, go through the NCD or LCD documents and identify local modifier requirements, such as KX.
Analyze Your Documentation
Evaluate the submitted documentation to see if you missed any relevant information that led to this denial. This may include insufficient clinical details or missing progress notes, diagnosis codes, or reports.
Identify Incorrect Diagnosis Code
If your claim was denied due to an incorrect diagnosis code, review the provided service and apply the correct code that reflects the patient’s condition.
Submit a Redetermination Request
After making all the necessary corrections, submit a redetermination request to the correct payer. This involves filing an appeal with supporting documentation, including solid justification for the medical necessity of a service.
Follow-up on the Request
For quick reimbursement, track the progress of your redetermination request. Follow up with the insurance company to make sure everything is on time and reply to their additional demands.
Consider Outsourcing
Coverage requirements are often vague. Moreover, they are frequently updated. So, if you don’t have the knowledge or time to keep up with payers’ changing policies, outsource denial management services to a denial management specialist. Many top billing companies offer affordable denial management solutions. Choose a reliable name and watch them quickly resolve your CO 50 denials.
Bottom Line
To summarize, CO 50 is one of the most common denial codes. It simply highlights that the insurance company has found the billed service irrelevant (or medically unnecessary) to the patient’s condition. In short, it points towards non-covered services or procedures. Each payer has its own coverage policy.
Many insurers deem costly treatments to be unnecessary, especially when cost-effective alternatives are also available. Some use the CO 50 denial code for treatments that exceed their set limits. Our guide has provided all the important details about this code so you can avoid and resolve the recurring denial code 50.
