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Denial Codes

CO-97 Denial Code: Bundled Services, NCCI Edits and the Fix

What the payer means by “included in another service,” how to read the NCCI modifier indicator before you touch the claim, and when CO-97 is a corrected claim, an appeal or a write-off.

CO-97 is the denial code a payer uses when it considers a billed service already paid as part of another service, the adjustment billers call bundling. X12 defines Claim Adjustment Reason Code 97 as “The benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated.” The CO group means Contractual Obligation: the amount is written off under the contract or corrected on the claim, never billed to the patient.

Whether a CO-97 is money you can recover depends on one fact you can look up in a minute: the modifier indicator on the code pair. This page walks through it.

Last updated October 23, 2026. Reviewed by Jacob Greenberg, ClaimCarePro.

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The official CO-97 definition

Quoted from the X12 Claim Adjustment Reason Code list, read October 23, 2026.

“The benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated. Usage: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.”
X12, Claim Adjustment Reason Codes, code 97 (start 01/01/1995, last modified 07/01/2017)

The usage note is the part most guides skip. When a payer applies its own bundling policy, the service line on the 835 can carry a Healthcare Policy Identification reference naming that policy. Get it from the 835, not the paper EOB, before you decide whether to fix or fight. Neighboring codes are easy to confuse with 97: CARC 59 is a multiple-procedure reduction, CARC 234 is “This procedure is not paid separately,” and CARC 236 names an NCCI incompatibility directly.

Group codes and the patient balance

CO-97 almost always comes as CO, Contractual Obligation, which makes the bundled amount the provider's adjustment. The patient's share is whatever the payer reports under PR on the line it did pay, such as deductible (CARC 1), coinsurance (CARC 2) or copay (CARC 3). Billing the patient for the bundled code is billing for a service the payer says it already paid, which in-network contracts generally do not allow.

Read the NCCI modifier indicator before anything else

From CMS's MLN guide to the Medicare NCCI tools. The tables update quarterly.

NCCI correct coding modifier indicators
IndicatorCMS definitionWhat it means for your CO-97
0 (Not Allowed)No modifiers associated with NCCI allow you to use this PTP code pair; only the Column 1 code will be paid for the same patient on the same day.Write it off. A modifier will not get the Column 2 code paid, and the patient is not billed.
1 (Allowed)You can use NCCI-associated modifiers with this PTP code pair when appropriate.Recoverable if the record shows a distinct site, session, practitioner or time block. Corrected claim with the right modifier.
9 (Not Applicable)There is no active edit for this PTP code pair.Not an NCCI denial. Ask the payer which policy it applied and appeal if it does not fit.

Look the pair up in the Medicare NCCI PTP edit tables for the quarter of the date of service. Search the code that was denied in Column 2. CMS's own guide warns that if you do not download the files every quarter, you are using the wrong edits.

Remark codes that most often come with CO-97

Remark codes paired with CO-97
RARCOfficial description (X12)Usual situation
M15Separately billed services/tests have been bundled as they are considered components of the same procedure. Separate payment is not allowed.Component codes billed alongside the comprehensive code.
M80Not covered when performed during the same session/date as a previously processed service for the patient.Second code processed after the first one paid on an earlier claim.
N19Procedure code incidental to primary procedure.A minor procedure considered part of the main one.
N20Service not payable with other service rendered on the same date.Same-day pairs, including E/M with a procedure.
M86Service denied because payment already made for same/similar procedure within set time frame.Repeat services and global-period visits.

Top causes of CO-97

Common causes of CO-97
CauseWhat happenedSource of the rule
NCCI pair, indicator 0Two codes that are never paid together for the same patient, provider and date.CMS MLN1783722; NCCI PTP tables
NCCI pair, indicator 1, no modifierSeparate and distinct services billed without 59 or an X modifier (XE separate encounter, XS separate structure, XP separate practitioner, XU unusual non-overlapping service).CMS MLN1783722
E/M on the day of a procedureA visit billed with a procedure without modifier 25, or with 59, which CMS says should not be appended to an E/M.CMS MLN1783722
Global surgical packagePost-op visits inside the 10- or 90-day global period, or a pre-op visit the day before major surgery, billed separately.Pub. 100-04 Ch. 12 §40.1
Decision-for-surgery visitThe E/M that led to a major surgery billed without modifier 57.Pub. 100-04 Ch. 12 §40.2
Timed codes in one time blockTwo timed therapy codes, such as 97140 and 97750, billed for the same 15-minute block.CMS MLN1783722, Example 9
Payer-specific bundlingA commercial policy that bundles a pair NCCI does not.The payer’s policy named on the 835

Therapy practices see the timed-code version most. CMS's example: manual therapy (97140) and a physical performance test (97750) can both be reported with modifier 59 when they were done in different 15-minute blocks, but not when they were done in the same block.

How to fix a CO-97, step by step

  1. Identify the pair. Find the code that was paid (Column 1) and the one adjusted (Column 2). If the paid code is on an earlier claim, pull that claim too.
  2. Check the modifier indicator for the date of service. Indicator 0: post the write-off and stop. Indicator 9 or no NCCI edit: go to step 5.
  3. Read the record. A modifier is only correct if the documentation shows a different anatomic site, a separate encounter, a different practitioner or a separate time block. CMS says not to use 59 or XU just because the code descriptors differ.
  4. Correct the claim. Add the most specific modifier (an X modifier, 25, 57, 24 or 79 as the situation requires; 59 only when nothing more descriptive fits). For commercial payers, send a replacement claim with frequency code 7 and the payer's original claim number in item 22, per the NUCC instructions. For Medicare, Ch. 34 §10.4 lists an incorrect “use of a modifier” as a clerical error handled through a reopening rather than an appeal.
  5. Appeal a wrong edit. If the codes were correct and the payer applied a bundling rule that does not exist for that pair or date, request the policy named on the 835, then appeal in writing with the operative note or treatment log showing why the services were separate.
  6. Record the outcome. Note the pair, the indicator and the decision so the same pair is scrubbed before the next claim.

Our billing software shows CO-97 with the note to verify against CCI edits, correct and resubmit when a supported modifier was omitted, and otherwise write off. That is the workflow our denial management service runs on every bundling denial.

When CO-97 is not the patient's responsibility

Under the CO group, never. A CO-97 adjustment is the payer telling you the service is paid inside another one, and the contract makes that a provider adjustment. Compare it with PR adjustments, which are the patient's share by definition, and with CO-45, the contractual write-off on the code that did pay. If a patient asks why a service shows as denied on their explanation of benefits, the honest answer is that the plan counts it as part of the other service and they owe nothing extra for it.

How to prevent CO-97

  • Load the current quarter's NCCI PTP tables into the claim scrubber.
  • Flag every same-day pair with indicator 1 for a documentation check before the claim goes.
  • Track global periods by surgeon and patient so post-op visits are not billed.
  • Have therapists record start and stop times for each timed code.
  • Keep a payer-by-payer list of commercial bundling policies that differ from NCCI.

Related codes: CO-16 (missing information) and CO-45 (contractual adjustment). Every code we cover is on the denial codes hub; for the bigger picture, read why medical claims get denied.

Bundling denials piling up?

ClaimCarePro works denied and aged A/R on a 10% contingency of what is actually paid: no recovery, no fee. Practices that want ongoing billing pay 6% of collections with a $1,000 monthly minimum, month-to-month, with denial work included. Start with a free A/R audit or call (844) 772-8902.

CO-97 questions, answered

What does the CO-97 denial code mean?
CO-97 means the payer considers the service already paid as part of another service. X12 defines CARC 97 as “The benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated.” It is a bundling adjustment, and the CO group means the patient is not billed for it.
Is CO-97 the same as an NCCI edit?
Often, but not always. For Medicare and many Medicaid and commercial plans, CO-97 is how a National Correct Coding Initiative procedure-to-procedure (PTP) edit shows up on the remit. Commercial payers also run their own bundling rules, which may not match NCCI. The 835 may carry a policy reference on the service line that names the rule applied.
Can a modifier fix CO-97?
Only when the edit allows one and the record supports it. In the NCCI tables, a modifier indicator of 1 means an NCCI-associated modifier such as 59, XE, XP, XS or XU can be used when appropriate. An indicator of 0 means no modifier will get the second code paid. CMS says not to use these modifiers just to bypass an edit.
Should I appeal CO-97 or send a corrected claim?
If you left off a modifier the documentation supports, send a corrected claim (frequency code 7 with the payer’s original claim number) or, for Medicare, request a reopening, since a wrong or missing modifier is listed as a clerical error. Appeal when the codes were billed correctly and the payer applied an edit that does not exist or does not fit.
Can I bill the patient for a CO-97 denial?
No. The CO group code means Contractual Obligation: the payer considers the service paid inside the other procedure, and under your contract the bundled amount is written off, not moved to the patient. Only amounts reported under PR (patient responsibility) belong on a patient statement.
Why did I get CO-97 on an office visit billed with a procedure?
Because a same-day E/M is considered part of the procedure unless it was significant and separately identifiable. Modifier 25 is the modifier for that situation; CMS says modifier 59 should not be appended to an E/M service. Within a 90-day global period, the visit that produced the decision to operate takes modifier 57.
What remark codes come with CO-97?
Common ones on the X12 list are M15 (“Separately billed services/tests have been bundled as they are considered components of the same procedure”), M80 (not covered when performed during the same session or date as a previously processed service), N19 (procedure code incidental to primary procedure) and N20 (service not payable with other service rendered on the same date).
How do I prevent CO-97 denials?
Load the current quarter’s NCCI PTP tables into your scrubber, check each pair’s modifier indicator before the claim goes out, document distinct sites, sessions or time blocks when you use 59 or an X modifier, and track global periods so post-op visits are not billed as separate services.
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Last updated October 23, 2026. Reviewed by Jacob Greenberg, ClaimCarePro.

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