Denial Code CO-197: Causes, Solutions, and Prevention Tips

Denial Code CO-197 is a frequent issue that can cause significant disruptions in the revenue cycle of a physical therapy practice. Effectively managing CO-197 denials is essential to ensure that your practice receives the payments it deserves for the services provided. This blog will break down what CO-197 entails, its impact on your practice, and actionable steps to address and prevent these denials.

What is Denial Code CO-197?

Denial Code CO-197 indicates that the claim has been denied because the service is not paid separately when performed during the same encounter. This typically occurs when a procedure is considered part of a comprehensive service already reimbursed and is, therefore, not eligible for additional payment.

Why Does CO-197 Matter?

Repeated CO-197 denials can lead to substantial financial losses and increased administrative workload as your team navigates the complexities of payer rules regarding bundled services. Understanding and managing CO-197 denials are crucial to safeguarding your revenue cycle and maintaining smooth operations within your practice.

Deconstructing a CO-197 Denial: What Went Wrong and How to Fix It?

Example:

• Initial Billing:
  • CPT 97110: Therapeutic Exercise
  • CPT 97116: Gait Training

• Outcome: CPT 97116 (Gait Training) was denied under CO-197 because the payer considered it part of the therapeutic exercise session.

Remedy:

1. Review the Denial Reason: Check the Explanation of Benefits (EOB) to confirm the bundling issue.
2. Consult Payer Policies: Refer to the payer’s guidelines to determine if a modifier can be used to indicate that the services were distinct.
3. Resubmit with Modifiers: If applicable, resubmit the claim with the appropriate modifier, such as Modifier 59, to denote that the service was separate and distinct from the other services provided.

• Corrected Billing:
  • CPT 97110: Therapeutic Exercise
  • CPT 97116-59: Gait Training (with Modifier 59 to indicate it was distinct from CPT 97110)

Actionable Steps: How to Address a CO-197 Denial

1. Analyze the Denial: Carefully review the EOB or Remittance Advice (RA) to pinpoint the exact reason for the denial.
2. Gather Documentation: Compile all necessary documentation that supports the distinct nature of the services, including clinical notes and payer guidelines.
3. Correct and Resubmit: Modify the claim with the appropriate modifiers or corrections and resubmit it for payment.
4. Follow Up: Monitor the resubmitted claim and be prepared to appeal if the denial persists.

Common Causes of CO-197 Denials

1. Bundling of Services: The payer considers the billed service part of another comprehensive service provided during the same encounter.
2. Incorrect or Missing Modifiers: Failure to apply the correct modifiers that indicate distinct procedural services.
3. Lack of Clarity in Documentation: Insufficient documentation to demonstrate that the services were separately identifiable and necessary.

Proactive Prevention: Avoiding CO-197 Denials

Pre-Claim Submission Checklist:

• Verify Service Bundling Rules: Confirm which services may be bundled according to the payer’s policies.
• Ensure Accurate Use of Modifiers: Apply the correct modifiers, such as Modifier 59, to indicate distinct services when appropriate.
• Double-Check Documentation: Make sure documentation supports the distinct nature of each service billed.

Training and Best Practices:

• Regularly train your billing team on the latest bundling rules and the proper use of modifiers.
• Implement best practices for clinical documentation to ensure clarity in the distinctness of services provided.

Technology and Tools:

• Use billing software with built-in checks for bundling errors and appropriate modifier usage.
• Leverage claim scrubbing tools that identify potential bundling issues before submission.

Conclusion: Protect Your Practice’s Revenue with Expert Denial Management

Denial Code CO-197 can be a challenge, but with a thorough understanding of its implications and proactive management strategies, you can protect your practice’s financial health. By mastering modifier usage, maintaining clear documentation, and staying vigilant with claim submissions, you can minimize the risk of CO-197 denials and ensure that your services are fully reimbursed.

Take Action with SPRY

Handling denials like CO-197 doesn’t have to be overwhelming. SPRY’s advanced physical therapy software simplifies your billing process, helps identify potential errors before claims are submitted, and ensures your practice gets paid for the hard work you do. Schedule a demo today to see how SPRY can help streamline your billing and revenue cycle management.

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