How to fix a CO-96 denial
Read the remark code first: it says why the charge isn’t covered.
CO-96 means the payer will not cover the charge and has put the amount on the practice. The remark code with it names the reason: an excluded service, a benefit the plan lacks, or a rule the claim missed. Some are fixable; some are write-offs.
- Group code
- CO: the practice carries it
- Read first
- The remark code
- Patient bill
- Only under group code PR
- Usual fix
- Correct, appeal or write off
What CO-96 means
CO-96 is the payer saying the charge is not covered, so the line pays nothing. The official X12 description of reason code 96 is "Non-covered charge(s)." That is all the reason code says. X12 requires at least one remark code with it that is not an Alert, and that remark code holds the real reason.
Common pairings, from the X12 remark code list:
- N425: a statutorily excluded service
- N130: the plan’s benefit documents restrict this service
- N216: the plan doesn’t cover this type of service, or the patient isn’t enrolled in that part of the benefits
- N776: not a covered telehealth service
- N386 or N115: the decision rests on a Medicare NCD or LCD
Close cousins: code 50 is a medical necessity denial, 204 means the service isn’t covered under the patient’s current benefit plan, and 119 means a benefit maximum was reached. Our denial code reference covers the rest.
CO-96 or PR-96: who pays
Reason code 96 can carry either group code, and the group code decides who pays. Chapter 1 of the Claims Processing Manual says contractors use PR for non-covered charges when the beneficiary is liable and CO when the provider is. A line billed with modifier GY, for a service excluded by statute, comes back PR-96 with N425: the patient can be billed.
CO-96 means the payer put the amount on the practice. On a Medicare claim, that can mean the patient never got a notice the rules required. CMS’s radiology chapter, for example, assigns PR when the claim carries modifier GA for a signed ABN, and CO otherwise.
CMS’s remittance manual describes CO adjustments as generally a write-off for the provider, not billed to the patient. So a CO-96 balance stays off the patient statement unless the payer reprocesses it under PR. With other payers, your network contract decides whether a non-covered charge can move to the member.
Common CO-96 causes and how to fix each one
The remark code tells you which row you are in. Some are billing errors you can correct; others are true exclusions.
- Excluded by Medicare law (N425)Routine physicals, hearing aids, most dental care and cosmetic surgery are excluded. Bill GY, with GX if you gave a voluntary notice, so the line returns PR.
- Benefit not in the patient’s plan (N130, N216)Check the plan’s benefits on a fresh eligibility response. Bill other coverage if it includes the service; otherwise your contract decides who pays.
- Not a covered telehealth service (N776)Check the payer’s telehealth list for the date of service. If the visit was in person, correct the place of service and resubmit.
- NCD or LCD says never covered (N386, N115)Read the policy. A valid ABN signed before the service, with GA on the line, is what lets you bill the patient.
- ABN signed but GA left offThe line falls to the practice without GA. Correct it to add GA, and keep the signed ABN on file.
- Wrong code for the serviceIf a non-covered code was billed for a covered service, correct the code and resubmit.
- Benefit limit reachedThat is usually reason code 119. Check the benefits used this year, and bill the patient only where the plan and contract allow.
Never covered or not necessary: two different Medicare rules
Medicare treats two kinds of non-covered care differently. Services that are never covered, because the law excludes them or they aren’t a Medicare benefit, need no ABN. CMS’s ABN booklet says you may give a voluntary notice as a courtesy, the patient doesn’t choose an option or sign, and you bill GX, often with GY. Services Medicare covers but may find not reasonable and necessary need a mandatory ABN before the patient can be held liable.
The exclusions are listed in 42 CFR 411.15: routine physical checkups, eyeglasses and refraction exams, hearing aids, most dental care, cosmetic surgery, routine foot care and personal comfort items, among others. Chapter 30 calls these categorical denials, where the limitation on liability protection does not apply.
Telehealth is a common CO-96 source. Under chapter 12, a service billed with place of service 02 or 10 whose code isn’t a covered telehealth service is denied as CO-96 with N776.
If the claim should have carried GA or GY, a missing modifier is a clerical error that chapter 34 handles through a reopening, requested within one year of the initial determination.
How to work a CO-96, step by step
Read the remark code
Every CO-96 carries at least one remark code, and it names the reason the charge isn’t covered.
Check the patient’s benefits
Confirm what the plan covers on a fresh eligibility response, and whether other coverage applies.
Check the claim
Look for a wrong code, place of service or missing modifier that made a covered service look non-covered.
Correct or appeal
Correct a billing error. Appeal when the plan’s own terms cover the service and the payer misapplied them.
Check who can be billed
Bill the patient only under PR, or where your contract and a signed advance notice allow it.
Fix the front end
Add the check that would have caught it: benefits, notices or code choice.
How to prevent CO-96
Most CO-96s can be seen coming, so the work happens before the visit:
- Check benefits and exclusions for planned services with eligibility and benefits verification
- Tell patients in writing, before the service, when it isn’t covered and what it will cost
- For Medicare, bill GY for excluded services and GA when a required ABN is on file
- Check payer telehealth and coverage lists whenever codes or policies change
- Track CO-96 by remark code and payer each month through denial management
Non-covered charges the patient does owe go out on clear statements through our patient billing and support team.
The payer will not cover the charge, and group code CO puts the amount on the practice rather than the patient. Reason code 96 says only that the charge is non-covered. The remark code with it, such as N425 for a statutorily excluded service or N130 for a plan restriction, says why. Read it before you correct, appeal or write off the line.
Not while it carries group code CO. CMS uses PR for non-covered charges the patient owes and CO for those the provider owes. For a Medicare patient, the line comes back PR when you billed GY for an excluded service, or GA with a valid ABN on file. For other plans, your network contract decides when a member can be billed.
CO-50 says the service was not medically necessary for this patient, as billed. CO-96 says the charge is not covered, for whatever reason the remark code gives: an exclusion, a missing benefit or a policy. For Medicare patients the difference matters. Excluded services need no ABN, while services denied as not reasonable and necessary need a valid ABN before the patient can be billed.
No. CMS says an ABN is not required for care Medicare never covers, such as services excluded by statute or that aren’t a Medicare benefit. You may give one as a courtesy, without asking the patient to choose an option or sign, and bill GX with GY. A required ABN is for services Medicare may deny as not reasonable and necessary.
Yes, when the plan’s terms cover the service and the payer got it wrong, for example by applying an outdated policy or missing a benefit the plan includes. Send the benefit language and the notes. When the denial came from a billing error, such as a wrong code or place of service, correct the claim instead. When the service is excluded, an appeal won’t change the outcome.
For Medicare, a service billed with place of service 02 or 10 whose code isn’t on the covered telehealth list is denied as CO-96 with remark code N776. Check the code against the list for that date of service. If the visit was actually in person, correct the place of service and resubmit. Commercial and Medicaid plans keep their own telehealth rules.
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.
Not sure which non-covered charges you can recover?
Send us a sample of your CO-96 denials. We’ll sort them by remark code and show you which can be corrected, appealed or billed to the patient, free.