How to fix a CO-50 denial
Check the policy, the diagnosis and the notes, then appeal with the record.
CO-50 means the payer decided the service was not medically necessary, and the practice carries the loss. Check the coverage policy, the diagnosis on the claim and the notes. Correct a coding error, appeal with the record, or write it off.
- Group code
- CO: the practice is liable
- Usual cause
- Policy criteria not met
- Patient bill
- Only with a valid ABN
- Medicare appeal
- 120 days from the notice
What CO-50 means
CO-50 is a medical necessity denial: the payer decided this patient’s diagnosis, history or circumstances did not justify the service. The official X12 description of reason code 50 is "These are non-covered services because this is not deemed a ’medical necessity’ by the payer." The service may be covered for other patients, just not for this one as billed.
For Medicare, the rule is section 1862(a)(1)(A) of the Social Security Act, which excludes services that are not reasonable and necessary for the diagnosis or treatment of illness or injury. CMS’s ABN booklet adds that every service you bill must show the sign, symptom or complaint that makes it reasonable and necessary.
The remark code often names the policy: N115 for a Local Coverage Determination (LCD), N386 for a National Coverage Determination (NCD). X12 also points to the payer’s policy ID in the 835’s loop 2110 REF segment, when one is sent.
Related codes: 55 for experimental, 56 for not proven effective, 150 and 151 when the notes don’t support the level or number of services, and 96 for charges the plan never covers. Our denial code reference covers the rest.
Why it’s CO and not PR: the ABN
On a Medicare claim, the group code shows whether the patient was warned. Chapter 1 of the Claims Processing Manual says contractors use group PR for non-covered charges when the beneficiary is liable and CO when the provider is. For a medical necessity denial, the patient is liable only after signing a valid Advance Beneficiary Notice (ABN) before the service.
The same chapter has contractors deny lines billed with modifier GZ, meaning you expected a denial and gave no ABN, as CO-50. Under the limitation on liability rules, a provider who knew or should have known Medicare would not pay is liable without a valid notice, and CMS says a published NCD or LCD generally means you should have known.
Common CO-50 causes and how to fix each one
Read the policy the payer used first. The fix depends on whether the claim, the notes or the decision was wrong.
- Diagnosis doesn’t meet the policyCheck the policy’s covered diagnoses. If the notes support a covered diagnosis that wasn’t coded, correct the claim.
- Notes don’t show why it was neededIf the record supports it, appeal with the notes on signs, symptoms, history and earlier treatment. If not, write it off.
- No reply to a records requestMedicare reviewers deny as not reasonable and necessary when records don’t arrive in 45 days. Send the full record with an appeal.
- ABN signed but GA left offWithout GA the line falls to the practice. Correct the line to add GA, and keep the signed ABN on file.
- Service billed with GZGZ tells Medicare you gave no ABN, so the CO-50 is expected. Write it off unless the notes support necessity.
- Commercial plan medical policyCheck the plan’s criteria against the notes and appeal with both, or ask for a peer-to-peer review.
- Medicare Advantage denialMA plans must follow Medicare’s NCDs and LCDs. Appeal if the plan applied stricter criteria where Medicare’s are fully established.
ABNs and the GA, GZ, GX and GY modifiers
An ABN (form CMS-R-131) shifts liability to the patient only when it is done right. Chapter 30 says it must be given before the service, name the item or service, and give a genuine reason you expect Medicare to deny it. Routine notices given to every patient, generic notices and forms signed blank are not valid.
It is for Original Medicare only, not Medicare Advantage or Part D, and never for a patient in an emergency or under great duress. Keep signed copies, generally for 5 years. The modifiers tell Medicare what notice you gave:
- GA: a required ABN is on file, so the patient can be billed if Medicare denies
- GZ: you expect a denial and gave no ABN, so the practice carries the loss
- GX: a voluntary ABN for a service Medicare never covers
- GY: the service is excluded by statute or isn’t a Medicare benefit
For services Medicare never covers, an ABN is only a courtesy, and GY lines come back as PR-96 with remark code N425, not CO-50.
How to work a CO-50, step by step
Find the policy
Use the remark code to find the NCD, LCD or payer policy and its rules.
Compare the claim
Check the diagnosis codes, their order and the units billed against what the policy covers.
Read the notes
Do they show the signs, symptoms, history and earlier treatment the policy asks for?
Correct, appeal or write off
A coding error is a correction. A correct claim with notes that meet the policy is an appeal. Otherwise, write it off.
Check the ABN
With a valid ABN and GA billed, the patient may be billed. Without them, the practice carries it.
Fix the step that missed it
Screen orders against the policy, and give an ABN when a denial is expected.
Appealing a CO-50
A medical necessity denial is a decision, not a clerical error, so for Medicare it goes to a redetermination within 120 days of receiving the initial determination. Send the notes and name the policy criteria they meet. LCDs and NCDs are in the Medicare Coverage Database.
If records were requested and never sent, the Program Integrity Manual gives 45 calendar days to answer a MAC’s request before the reviewer denies the claim. Send the complete record with the appeal.
Medicare Advantage plans may use their own criteria only where Medicare’s are not fully established, under 42 CFR 422.101, and must weigh the patient’s history, the physician’s recommendations and the clinical notes. Commercial and Medicaid plans publish their own policies and deadlines.
How to prevent CO-50
Medical necessity is decided by the policy before the visit and by the note after it. Prevention sits at both points:
- Check orders for tests and procedures against the LCD, NCD or payer policy when they are scheduled
- Code the diagnosis that supports the service as specifically as the notes allow, with review by certified medical coders
- Get prior authorization where the plan requires it, so necessity is reviewed first
- Give a valid ABN before the service when you genuinely expect Medicare to deny it, and bill GA
- Track CO-50 by code, payer and policy each month through denial management
When a service is denied because no approval was on file, the code is CO-197, not CO-50.
The payer decided the service was not medically necessary for this patient, as billed, so it will not pay. CO means the practice carries the amount, not the patient. The remark code usually points to the policy behind the decision, such as N115 for a Medicare LCD or N386 for an NCD, and that policy shows what the claim and notes needed.
Not under CO. For Medicare, the patient can be billed for a medical necessity denial only after signing a valid ABN before the service, with GA on the line, and then the remittance shows PR rather than CO. Without a valid ABN, the practice is liable and must refund anything already collected. For other plans, check your contract.
Appeal when the notes meet the policy’s criteria, and say which criteria they meet. If the claim simply carried the wrong or an incomplete diagnosis code, correct it instead. If the notes don’t support the service, an appeal will not change the result: write it off and fix the step that missed it.
Both say you expected Medicare to deny the service as not reasonable and necessary. GA says you gave the patient a required ABN and have it on file, so the patient can be billed if Medicare denies. GZ says you did not, so Medicare denies the line as CO-50 and the practice carries the loss.
No. CMS says the ABN is for Original Medicare and is not used for Medicare Advantage or Part D. With an MA plan, follow its prior authorization rules: under 42 CFR 422.138, a plan that approved a service in advance may not later deny it for lack of medical necessity, except for good cause or fraud.
For Medicare, 120 days from receiving the initial determination, and receipt is presumed 5 days after the notice date. Medicare Advantage, Medicaid and commercial plans set their own deadlines in the provider manual or contract, and some are much shorter. Calendar each denial against its payer’s deadline the day it posts.
Yes. We don’t list our clients on this site, but ask us and we’ll arrange it: with a current client’s permission, we share their contact details so you can hear how we work from them directly.
Losing payment to medical necessity denials?
Send us a sample of your CO-50 denials. We’ll check each one against the policy and the notes and show you which can still be appealed, free.