Decoding Denial Code CO-97: Common Scenarios and How to Fix Them

Claim denials remain one of the most pressing challenges in revenue cycle management. Among them, Denial Code CO-97 is one of the most common — but also one of the most misunderstood. Too often, practices treat it as a routine “bundling denial,” without digging deeper into the coding, documentation, or compliance issues behind it.

With payer systems becoming increasingly automated and reliant on claim-editing rules, CO-97 denials are rising. To stay financially strong, practices must not only understand the code but also learn to prevent it through proactive strategies. For a deeper dive into root causes and fixes, explore our guide: CO-97 Denial Code: Causes and Fixes.

What Does Denial Code CO-97 Mean?

Denial Code CO-97 indicates that the service or procedure submitted is not separately reimbursable because it is bundled into the payment for another billed service. This is a Contractual Obligation (CO) denial, meaning the provider cannot bill the patient for the denied service.

Common payer-driven triggers:

• Evaluation & Management (E/M) visits within the global surgical period (10 or 90 days).

• Specimen collection fees billed during a visit where lab services are already covered.

• After-hours care codes when the provider operates 24/7.

• Therapy or ancillary services that overlap with another primary procedure on the same day.

Real-World Examples of CO-97 Denials

Example 1: E/M During a Global Period

A surgeon performs a minor procedure on Monday and bills an additional office visit two days later. The payer denies the E/M claim with CO-97 because the visit falls under the 10-day global period.

Solution: Use Modifier 24 if the E/M service is unrelated to the procedure (e.g., a different diagnosis). Documentation must clearly support this distinction.

Example 2: Specimen Handling Fee

A clinic bills CPT 99000 (specimen handling) along with the office visit. The claim is denied with CO-97 because the payer considers the handling included in the office visit reimbursement.

Solution: Avoid billing CPT 99000 unless the payer allows it. Review guidelines before submission.

Example 3: After-Hours Services

A 24/7 urgent care center bills CPT 99051 (after-hours service). The claim is denied with CO-97 because payers expect continuous availability.

Solution: Only use after-hours codes when the service truly falls outside normal operations and is well documented.

Example 4: Physical Therapy and Evaluation on the Same Day

A patient receives an E/M service and physical therapy on the same day. The therapy claim is denied as CO-97, citing bundling edits.

Solution: Append Modifier 59 (or XE, XS, XP, XU) when services are truly distinct, with strong documentation. For more details on denial codes and their resolutions, see this comprehensive resource.

Advanced Strategies for Preventing CO-97 Denials

1. Denial Trend Analysis
   Monitor CO-97 frequency by payer and CPT code. Spot recurring issues early to reduce preventable denials.

2. Automated Claim Scrubbing
   Use RCM software to flag NCCI bundling conflicts before submission.

3. Modifier Accuracy
   Apply Modifier 59 or related sub-modifiers only when services are distinct. Incorrect use increases audit risk.

4. Provider Documentation Training
   Educate providers on how to document “distinct” services during global periods.

5. Payer-Specific Workflows
   Build payer playbooks with bundling rules, appeal deadlines, and escalation paths.

For practices struggling with recurring denials, MBW RCM offers dedicated Denial Management Services to help identify patterns, streamline appeals, and improve first-pass resolution rates.

Key Pre-Submission Questions

Before submitting claims, ask:

• Is the service inherently included in another procedure?

• Was it performed at a separate encounter or site?

• Does documentation clearly support medical necessity?

• Can an appropriate modifier be applied compliantly?

• Have payer-specific bundling edits been reviewed?

Final Thoughts

Denial Code CO-97 is more than a simple bundling denial — it’s a sign of deeper issues in coding, documentation, and payer compliance. By understanding scenarios, applying proper modifiers, analyzing denial patterns, and using payer-specific strategies, practices can prevent unnecessary denials and safeguard revenue.

👉 At MBW RCM, we combine denial analytics, technology-driven edits, and payer expertise to help providers reduce CO-97 denials and strengthen their bottom line.

FAQs: Denial Code CO-97 in Medical Billing

1) What does denial code CO-97 mean?+

Denial Code CO-97 means the billed service is not separately reimbursable because it is considered bundled with another procedure. It falls under the “Contractual Obligation” category, so providers cannot bill the patient for this service.

2) What are common scenarios that trigger CO-97 denials?+

Typical examples include Evaluation & Management (E/M) services within a global surgical period, specimen handling fees billed with office visits, after-hours service codes when the provider is always open, or therapy services overlapping with other procedures.

3) Can denial code CO-97 be appealed?+

Yes, but only in certain cases. If documentation supports that the service was truly distinct, providers may use appropriate modifiers (such as Modifier 24 or 59) and submit an appeal with clinical justification.

4) How can Modifier 59 help with CO-97 denials?+

Modifier 59 indicates that a service is distinct and separately identifiable, such as a procedure performed at a different anatomical site or during a separate encounter. However, it should only be used when fully supported by documentation to avoid compliance risks.

5) How do providers prevent CO-97 denials?+

Prevention strategies include thorough documentation, proper use of modifiers, payer-specific workflow adjustments, and using claim scrubbers that flag potential bundling conflicts before submission.

6) What risks come with mishandling CO-97 denials?+

Repeated misuse of modifiers or improper billing practices can lead to compliance audits, delayed reimbursements, and potential revenue loss.

7) How can MBW RCM help with CO-97 denials?+

MBW RCM provides specialized denial management services, payer-specific insights, and analytics to help practices reduce CO-97 denials, improve first-pass claim acceptance, and safeguard revenue.

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