Did you skip an important billing step—insurance coverage verification? If you did, you might encounter a CO 96 denial code. Claim denials are frustrating and harmful to the practice’s revenue. Denial code 96 is unique because it is not just a billing oversight but a potential patient conflict and a threat to your reputation.
It indicates non-covered charges, leaving many healthcare providers caught between a rock and a hard place, addressing operational inefficiencies without patient dissatisfaction. Want to avoid this tough situation? Begin by understanding why this denial code occurs and how to resolve and avoid it. Let’s explore everything about the CO 96 denial code.
CO 96 Denial Code – Description
Did you file a claim for an explicitly excluded service? Medicare and other insurers deny such claims with the CO 96 denial code. This code specifies the reason as ‘Non-Covered Charge(s).’ In simple words, denial code CO 96 indicates that the patient’s insurance plan does not cover the performed service or procedure or the billed item.
In other words, the insurance company is not responsible for the rendered services, and the financial responsibility falls on either the provider or the patient. The most important thing to remember is that payers usually pair the denial code 96 with at least one type of remark code, the NCPDP Reject Reason Code or the Remittance Advice Remark Code (RARC).
Since these remark codes only offer additional information, the RARC associated with this denial code is usually not an ‘alert’ or warning code. You may see RARC on general claims for services or procedures. On the other hand, insurance companies use the National Council for Prescription Drug Programs (NCPDP) Reject Reason Code with pharmacy-related CO 96 denials.
Common Causes of CO 96 Denial Code
So, what are the common reasons for receiving the CO 96 denial code? Here are several factors that usually lead to a CO 96 denial.
Lack of Insurance Coverage Verification
By now, it must be clear that CO 96 denial occurs when you file claims for non-covered services. These could be investigational or experimental procedures or out-of-network services. But how do practices make this mistake? The reason is quite simple! By overlooking the coverage verification step!
Many providers and practices fail to verify a patient’s insurance coverage before providing services. Hence, they unknowingly bill for services, procedures, or medicines that are not a part of their patient’s insurance plans. This leads to insurance companies denying their claims with denial code CO 96.
Medically Unnecessary Services/Procedures
Insurance companies only cover medically necessary services. So, if you file a claim for a service or procedure unrelated to the patient’s condition, the payer will deny your compensation request with the CO 96 denial code.
Missing Pre-Authorization
Some payers only ensure coverage when you obtain pre-authorization for high-cost or high-risk services, including certain medications, durable medical equipment (DMEs), and non-emergency surgeries. Hence, a lack of prior authorization can also result in the CO 96 denial.
Incomplete or Incorrect Documentation
As always, documentation is the key to successful billing. Healthcare practices and providers face CO 96 denials when they fail to offer sufficient justification, which often includes a patient’s medical records, for the provided services or procedures.
Payer Confusion
You may also experience the CO 96 denial code due to payer confusion. If a patient has multiple insurance plans, healthcare providers often bill their services to the wrong insurer who does not cover them.
Incorrect Coding or Billing
One of the most common reasons for CO 96 denials is incorrect coding. Assigning different CPT/HCPCS codes to the provided services can often result in non-covered charges. Billing errors, like missing modifiers (KX, GA, GZ, or GY), incorrect patient information, and incorrect documentation can also cause problems.
How to Prevent Denial Code CO 96?
The CO 96 denial code can put a financial strain on your practice and damage your relationship with your patients. If you want to avoid this denial code altogether, take the following proactive steps.
Confirm Insurance Coverage
Insurance verification in advance can save you from many unexpected billing surprises, including CO 96 denials. This proactive step helps healthcare providers verify the insurance status of a patient as well as coverage limitations and exclusions.
Therefore, don’t skip this step, and always identify the non-covered services, procedures, or items before providing any treatment.
Review Local Coverage Determinations (LCDs)
You can find all your answers in the Local Coverage Determination (LCD). Maintained by a Medicare Administrative Contractor (MAC), LCDs define Medicare’s coverage policies, including which services are medically necessary for a patient’s treatment.
Therefore, familiarize yourself with LCDs and other payer-specific policies and only bill for eligible services.
Obtain Prior Authorization (if required)
Insurance coverage verification will also help you identify services that may require prior approval from the payer. Therefore, make sure to obtain the essential pre-authorization for high-cost and high-risk services before providing them to the patient to avoid denial code 96.
Improve Coding & Documentation Practices
Familiarize yourself with your specialty’s coding set and annual updates. Use accurate ICD-10 and HCPCS/CPT codes and appropriate modifiers to bill your services. Also, improve your documentation practices and record everything to justify the medical necessity of the provided service. Accurate coding and complete documentation will help you avoid denial code CO 96.
Check Claims before Submissions
Claim scrubbing can help you catch hidden mistakes that may lead to CO 96 denials. Therefore, scrub your claims before submitting them to the payers to rectify any potential issues.
Communicate with Payers & Patients
If you have any questions regarding the insurance coverage of a patient, contact the appropriate insurance company. Keep your patients on the same page and inform them about the non-covered services to avoid potential conflict.
Communicate the financial responsibility to the patients in case of CO 96 denials and obtain written consent before proceeding with the treatment.
Educate Your Billing Team on Policy Updates
Besides frequent training on common billing mistakes, coverage guidelines, and documentation requirements, educate your staff about the changing policies. Keep them well-informed and teach them to regularly review every patient’s insurance plan to prevent CO 96 denials.
How to Resolve Denial Code CO 96?
Want to improve your financial and operational efficiency? Follow these simple tips to resolve the persistent CO 96 denial code.
Check the Denial Details
Review the Remittance Advice (RA) sent by the payer to understand the exact reason for the denial. Check associated remark codes with the CO 96 denial code (RARC or NCPDP Reject Reason Code) for extra information.
Verify Insurance Coverage
If you skipped the verification step before, the next step is to review your patient’s insurance coverage. This will help you identify whether the service is included in the patient’s insurance plan or if it simply exceeds benefits limits. In case of any query, contact the payer to confirm insurance details.
Identify Billing Mistakes
You might have received the CO 96 denial code due to billing oversight. Check for billing mistakes, including missing prior authorization, modifiers, incorrect codes, or documentation.
Make Necessary Corrections & Resubmit the Claim
If the insurer denied your claim due to billing mistakes, make the necessary corrections and resubmit the claim.
File an Appeal
If you don’t find any problem with your claim, request the payer to reconsider their initial decision. File an appeal to the appropriate insurer with all the relevant documentation and a detailed letter supporting your case. Keep an eye on the appeal deadlines and submit within the specified period.
Communicate Financial Responsibility to the Patient
If the denial was justified and you filed a claim for non-covered service, look for other payment options or inform the patient about their financial responsibility.
Bottom Line
To summarize, insurance companies use the CO 96 denial code to specify a non-covered charge. While this denial code may initially seem like an insignificant issue, repeated CO 96 denials can negatively affect your reputation and financial operations. We have provided every detail about this denial code, from its common reasons to effective resolution strategies, to help you improve your billing process. However, if you still find the entire resolution process confusing and time-consuming, choose a reliable company that offers denial management services. Opt for outsourcing and minimize patient conflicts with effective denial management!
