CO 97 Denial Code: Meaning and Checks for Lab Claims

What Does the CO 97 Denial Code Mean?

CO 97 means the insurer has included payment for a billed service in the allowance for another service already processed. In plain language: “We consider this service covered by another payment, so we will not pay for it separately.”

The code has two parts:

• CO: Contractual Obligation: Assigns the adjusted amount to the provider.
• 97: Claim Adjustment Reason Code (CARC): Explains why the insurer did not allow separate payment.

CO-97 and CO 97 mean the same thing. The adjustment may affect one service while other services on the claim receive payment.

When and Why Does CO 97 Appear?

The insurer returns CO 97 after it reviews a claim, which is the laboratory’s request for payment. The code appears on the remittance advice, the insurer’s explanation of how it processed the claim.

CARCs are standardized codes maintained by the Claim Adjustment Status Code Maintenance Committee and published by X12, a standards organization. The code explains the decision; the insurer’s payment policies determine whether the services qualify for separate payment.

For laboratories, one possible cause is bundling: payment for a group of tests includes its individual components.

For example, a lab bills a lipid panel and separately bills the cholesterol test performed as part of that panel. Medicare’s laboratory coding rules restrict separate reporting of included panel components. This overlap could lead to CO 97, although the exact code depends on the insurer.

How Do You Resolve a CO 97 Denial Code?

First identify which other service supposedly includes the unpaid test. CO 97 alone does not name that service or prove the decision is correct.

1. Read the insurer’s response. Identify the affected test, adjustment amount, remark codes, and policy references.
2. Find the related service. Check whether a panel or another procedure already includes the test. Ask the insurer if this is unclear.
3. Compare the records and billing rules. Confirm what was ordered and performed, and whether separate payment is allowed.
4. Choose the appropriate response. Correct an incorrectly billed component, request reconsideration when separate payment is supported, or accept a correct contractual adjustment.

Do not automatically charge the patient. For Medicare, CO assigns responsibility to the provider; PR identifies patient responsibility. For other insurers, check the contract and applicable requirements

How Can You Prevent CO 97 Billing Errors?

Before submission, check whether individual tests are already included in a billed panel. Review the insurer’s current rules and investigate billing-system settings that repeatedly add both a panel and its components.

Keep medically necessary repeat tests clearly documented. A separately required result differs from the original test already included in a panel.

These checks help prevent avoidable errors, but an insurer may still return CO 97 incorrectly. Review each adjustment before accepting it.