Have you been putting in long hours and providing the best care to your patients, only to face payment denials and unexpected fees? The life of a healthcare provider is challenging enough without having to navigate the confusing world of medical billing and insurance claims. Unfortunately, you may encounter cryptic denial codes that can be frustrating to understand and appeal to. You may have encountered the CO-45 denial code on your claims if you are a healthcare provider. This code indicates that the charges exceed the fee schedule, maximum permitted amount, or contracted or legislative fee arrangement. In other words, based on your contract with them, the insurance company has paid you less than what you billed for the service.
This can be frustrating and confusing, especially if you are trying to understand why the denial occurred or how to resolve it. This blog post will explain the CO-45 denial code, what causes it, and quick fixes to claim denial.
What is CO-45 Denial Code?
Denial code CO-45 is a standard message that provides information about a claim that an insurance company cannot accept. It is an example of a claim adjustment reason code (CARC) used to communicate the reason for a denial or a reduced payment.
In this instance, “CO” stands for “Contractual Obligation.” These contractual obligations stem from the valid contract between healthcare providers and insurers. A contract between these two entities can have a binding agreement between both parties on what services and prices they’ll cover. In other words, it refers to the difference between what the physician charges for a service and what the insurance plan allows according to the contract.
This agreement may specify the rate, maximum duration in hours or days, or number of units for a specific procedure. For example, if the contract states that the insurance company will pay $100 for a chest X-ray, but the physician charges $120, the claim will be denied with the CO-45 code, and the physician will receive only $100.
What Causes CO-45 Denial Code?
The most common cause of the CO-45 denial code is that the physician charged more for the healthcare service than the insurance plan allowed as per the contract. This can happen for several reasons, such as:
- The physician did not update their fee schedule according to the latest changes in the contract.
- The physician did not verify the patient’s eligibility and benefits before providing the service.
- The physician did not follow the coding guidelines or used an incorrect modifier.
- The physician did not document the medical necessity or justification for the service.
Another possible cause of the CO-45 denial code is that the claim was submitted more than once for the same service. This is a duplicate claim, which can also result in a reduced payment or a rejection. This can happen for several reasons, such as:
- The physician did not receive a confirmation of claim submission or payment.
- The physician did not check the claim status before resubmitting it.
- The physician used different billing information or identifiers for the same service.
- The physician submitted multiple claims for different dates of service or locations.
How to Avoid CO-45 Denial Code?
The best way to avoid the CO-45 denial code is to follow the contract terms and conditions with the insurance company. This means you should charge only what the contract allows for each service and submit only one claim per service.
You can also use a clearinghouse service to check your claims before submitting them to the insurance company. A clearinghouse service can help you verify the accuracy and completeness of your claims, identify any errors or discrepancies, and correct them before they cause denials.
For example, if you use Etactics as your clearinghouse service, they can help you with claim scrubbing, real-time alerts on denials, and assistance with appeals. They can also help you with revenue cycle management (RCM), which manages your claims from submission to payment. RCM can help you optimize your cash flow, reduce costs, and improve patient satisfaction.
How to Appeal CO-45 Denial Code?
You can appeal if you receive a CO-45 denial code and believe it was unjustified or incorrect. You should first review the claim status and check if the payment went toward the patient’s deductible or coinsurance. If not, you can submit an appeal request with supporting documentation to the insurance company.
You should include a copy of the claim, a copy of the contract, an explanation of why you believe the denial was wrong, and any evidence that supports your claim. You should also follow the appeal guidelines and deadlines of the insurance company.
For example, if you use Noridian as your insurance company, they allow you to submit an appeal request within 120 days of receiving the denial notice. You can submit your appeal request online via their portal, mail, or fax.
You can also use a telehealth service to provide remote patient monitoring (RPM) for your patients. RPM uses digital health technologies to monitor and communicate with patients outside of traditional healthcare settings. RPM can help you improve patient outcomes, reduce readmissions, and increase reimbursements.
For example, if you use Coronis as your telehealth service, they can help you with RPM solutions customized to your practice and your patients. They can also help you with interoperability, which is the ability of different health information systems to exchange and use data. Interoperability can help you improve your data quality, efficiency, and care coordination.
Conclusion
CO-45 denial code is common in medical billing and can affect your revenue and cash flow. It means that your charges exceed the fee schedule or contract with the insurance company. To avoid or appeal this denial code, you should follow these steps:
- Review your contract terms and conditions with the insurance company.
- Charge only what the contract allows for each service.
- Submit only one claim per service.
- Use a clearinghouse service to check and correct your claims.
- Review your claim status and payment details.
- Submit an appeal request with supporting documentation if needed.
- Use a telehealth service to provide remote patient monitoring and interoperability for your patients.
We hope this blog post has helped you understand the CO-45 denial code and how to get assistance. If you want to get rid of the CO-45 denial code and other billing headaches, you need CareCloud Concierge. It’s a full-service medical billing solution that handles everything from claims to collections. Contact us today and let us take care of your billing while you take care of your patients.
