Revenue cycle

CO-97 and bundling: when a "denial" should have been paid

CO-97 means the payer decided this line is already paid for inside another service, so the line pays zero and the provider absorbs it. Often that's right. It's wrong when the edit wasn't in effect on the date of service, when the payer denied the wrong code of the pair, or when it ignored a modifier you billed, and you can check each of those against CMS's own files.

What CO-97 means

X12's usage note for CARC 97 says: "Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present" (X12). The payer can name the policy it applied there, so check the 835 before you guess.

Group code CO (X12) puts the amount on the provider; Medicare beneficiaries can be billed "only when an adjustment shows Group Code PR" (CMS MLN). Unlike CO-45, which trims a line to the allowed amount, CO-97 usually takes the whole line to zero.

The remark code tells you which rule

CARC 97 says the line was bundled; the remark code says under which rule.

Neighboring reason codes (X12): 236 flags a combination incompatible under NCCI or workers' compensation rules; 234 reads "This procedure is not paid separately"; B15 means a required qualifying service hasn't been adjudicated. CARC 59 is a multiple-procedure reduction, a different problem (see CO-59).

How NCCI procedure-to-procedure edits work

Each PTP edit is a code pair. When both are reported for the same beneficiary on the same date of service, "the Column One code is eligible for payment, but the Column Two code is denied unless a clinically appropriate NCCI PTP-associated modifier is allowed and reported" (NCCI Policy Manual, Introduction).

Every pair carries a Correct Coding Modifier Indicator (CCMI) (NCCI Policy Manual, ch. I §E):

The modifiers that can bypass an edit (same section):

• Anatomic: E1–E4, FA, F1–F9, TA, T1–T9, LT, RT, LC, LD, RC, LM, RI
• Global surgery: 24, 25, 57, 58, 78, 79
• Other: 27, 59, 91, XE, XS, XP, XU

Modifiers 22, 76 and 77 do not bypass a PTP edit.

CMS posts PTP files quarterly on its PTP edits page (2026 Q4 is version 32.3); each pair has an effective date and, once retired, a deletion date. A change "is not retroactive and has no bearing on prior services unless specifically updated with a retroactive effective date" (Introduction).

Medicare applies NCCI, and state Medicaid programs implement it under section 6507 of the Affordable Care Act (Introduction). Commercial plans run their own edits, so check the payer's claim-editing policy and your contract.

Five times CO-97 is wrong

1. The edit didn't apply on that date of service

Find the pair in the PTP file for the quarter of the date of service. If it isn't there, or its deletion date falls on or before that date, the Medicare or Medicaid denial has no edit behind it. Appeal and cite the file version.

2. The payer denied the wrong code

A PTP edit denies the column two code. If CO-97 landed on column one, the payer applied the pair backwards. Appeal, quoting the column order.

3. You billed a valid modifier and the payer ignored it

Check that the pair's CCMI is 1 and the modifier was on the claim. The record must also support a separate encounter, structure, practitioner or non-overlapping service, as CMS defines XE, XS, XP and XU; CMS allows these modifiers "on Column 1 or Column 2 codes" (MLN1783722, citing CR 11168). Here the payer made the error, so appeal with the procedure note.

4. An E/M was bundled when modifier 25 or 57 applied

Modifier 25 marks a significant, separately identifiable E/M on the day of a minor (000 or 010) or XXX procedure (ch. I §E.b). Modifier 57 marks the visit that produced the decision for a major (090) surgery, on the day of or the day before (Claims Processing Manual ch. 12, §30.6.6.C). After surgery, an unrelated E/M takes 24 and an unrelated procedure takes 79 (§40.2.A.7). If the modifier was on the claim, appeal; if it was missing, correct.

5. The visit fell outside the global period

Count it CMS's way (ch. 12, §40.1.E). A major surgery covers the day before, the day of surgery and 90 days after, so surgery on January 5 runs January 4 to April 5. A minor procedure covers the day of surgery plus 0 or 10 days; a 10-day global from January 5 ends January 15. After that day, M144 doesn't fit.

One more case: CARC 97 says the other service "has already been adjudicated." If that service was itself denied, there's no payment to bundle into, and it's reasonable to ask the payer to reprocess the line. That's our reading of the code text; CMS hasn't ruled on it.

Corrected claim, reopening or appeal?

Some MACs take these fixes online: First Coast, for one, handles eligible CO-97 claims as clerical reopenings in its SPOT portal (First Coast). Check your MAC's process.

"A modifier shall not be appended to a HCPCS/CPT code solely to bypass an NCCI PTP edit if the clinical circumstances do not justify its use" (ch. I §E). Adding 59 that the record doesn't support is a compliance problem. Modifier 59 "shall only be used if no other modifier more appropriately describes the relationships" of the codes (ch. I §E.d), so XE, XS, XP or XU usually come first (MLN1783722).

A worked example

Illustrative scenario, not a real claim or edit pair. An office bills procedure code A (010 global) and an E/M on the same date. The E/M comes back CO-97 with M144.

1. If the visit only decided to do the procedure, the bundling is correct: Medicare doesn't pay a separate E/M for the decision to perform a minor procedure (ch. I §E.b), and 57 isn't used with minor surgeries (ch. 12, §40.2). Write it off.
2. If the note documents a significant, separately identifiable problem and 25 was on the E/M, the payer ignored a valid modifier. Appeal with the note.
3. If the note supports it but 25 was missing, request a reopening (Medicare) or send a corrected claim (other payers).

Finding the pattern

One CO-97 is a claim. The same pair denied over and over by one payer points to an edit configuration problem or a policy that conflicts with your contract. Track CO-97 by payer, code pair and remark code, and raise a pattern with the payer once instead of appealing line by line. Your expected reimbursement should follow the modifiers you billed, and underpayments in medical billing covers the rest of the code family.

Questions

What does CO-97 mean?

CO-97 means the payer considers the service included in the payment for another service on the same claim or date. The CO group code puts the amount on the provider, and the line usually pays nothing. The remark code next to it says which bundling rule the payer applied.

Can I bill the patient for CO-97?

No. Medicare lets providers bill beneficiaries for an unpaid amount only when the adjustment carries group code PR, and CO-97 carries CO. If the bundling is wrong, the remedy is a reopening, corrected claim or appeal with the payer.

Does modifier 59 fix CO-97?

Only when the services really were distinct and the edit's modifier indicator is 1. CMS says to use 59 only when no more specific modifier applies, so XE, XS, XP or XU usually come first, and a modifier must never be added just to get past an edit.

Should I appeal CO-97 or send a corrected claim?

If a modifier that applied was left off the claim, correct it: for Medicare that's a reopening, and for other payers it's their corrected-claim process. If the modifier was on the claim, or the edit didn't apply on that date of service, appeal. A corrected claim can't fix a payer error.

What does CO-97 with M15 mean?

M15 says the separately billed services were bundled because the payer considers them parts of the same procedure. For Medicare and Medicaid that usually points to an NCCI procedure-to-procedure edit, so look up the code pair in the edit file for the quarter of the date of service.

Last reviewed October 19, 2026. This guide is general information about payer payment rules, not legal advice. Your payer contract and provider manual control the details; check them before you file.