Understanding Denial Code CO 97: A Guide for Healthcare Practices to Maximize Revenue

Revenue loss due to claim denials is one of the most persistent challenges for healthcare practices. In fact, according to a 2021 study, nearly 17% of in-network claims submitted via healthcare.gov were denied—totaling approximately 48 million out of 292 million claims. For healthcare providers, this translates into delayed payments, lost revenue, and administrative headaches.

At Svast Healthcare Technologies, we understand that the best way to combat claim denials is through knowledge and preparation. One of the most commonly encountered denial codes is CO 97. Here’s what your team needs to know about this code—and how to handle it effectively.

What Is Denial Code CO 97?

Denial Code CO 97 refers to a Contractual Obligation where the benefit for a service is included in the payment for another service already billed. In simple terms, the insurance company considers the denied service to be bundled with another procedure, and therefore not separately payable.

Common Scenarios That Trigger CO 97

Here are some routine medical scenarios where CO 97 is commonly applied:

• Blood Sample Collection: When done as part of a patient encounter, this service is typically bundled and not billed separately.
• Specimen Handling and Transfer: Transferring specimens from the doctor’s office to the lab is often included in the main service.
• Post-Operative Evaluations: Evaluation and management (E/M) services during the post-op period are considered part of the surgical procedure. This period is generally 10 days for minor surgeries and 90 days for major surgeries.
• After-Hours Codes: If your practice operates 24/7, billing with after-hour codes may not be valid unless specific guidelines are met.

How to Resolve CO 97 Denials

Although denial code CO 97 is based on bundling logic, there are ways to dispute or prevent it under certain conditions:

• Verify Bundled Codes: Start by identifying whether the denied procedure is classified as bundled, mutually exclusive, or included under another CPT code.
• Check for Modifier Use: Consult with your coding team to determine if an appropriate modifier (like Modifier 25 or 59) can be applied to separate the service.
• Resubmit with Modifiers: If applicable, resubmit the claim with the correct modifier.
• Appeal if Necessary: If modifiers were used correctly but the claim was still denied, appeal the decision. Include medical records and documentation, along with the claim number and call reference number.

Proactive Measures to Reduce Claim Denials

Given ongoing issues like staffing shortages, payer inconsistencies, and regulatory shifts, it’s critical to eliminate preventable errors in the claims process. Here are a few tips:

• Use Clearinghouses: These platforms can scrub claims before submission and alert you to errors in real time.
• Educate Staff Regularly: Make sure your billing team stays updated on the latest coding rules and payer guidelines.
• Standardize Your Processes: Uniform claim workflows help reduce confusion and improve accuracy.

Conclusion

Denial Code CO 97 is a common roadblock, but with the right processes and knowledge, your healthcare practice can overcome it and protect its revenue stream. From accurate coding to effective appeals, every step counts.

At Svast Healthcare Technologies, we specialize in Revenue Cycle Management (RCM) solutions tailored to your practice’s needs. If you’re ready to reduce denials and streamline your billing process, get in touch with us today.