Denial Code CO-96: Handling Non-Covered Therapy Charges

Denial Code CO-96 is a common challenge that can impact the financial performance of physical therapy practices. A CO-96 denial occurs when a claim is denied because the payer determines that the billed service is not covered under the patient’s current benefits. Understanding how to handle these denials effectively is key to ensuring your practice is reimbursed for the services it provides. In this blog, we'll dive into the specifics of CO-96, explore actionable steps to resolve these denials, and offer tips on preventing them in the future.

What is Denial Code CO-96?

Denial Code CO-96 indicates that the service provided is not covered under the patient’s insurance plan. This can occur due to a variety of reasons, such as policy exclusions, limitations on the number of allowable visits, or specific services being deemed non-covered by the payer.

Why Does CO-96 Matter?

CO-96 denials can lead to unexpected revenue loss and increased administrative burdens as your billing team works to resolve these issues. Repeated non-covered service denials not only disrupt cash flow but can also result in billing disputes with patients, affecting overall patient satisfaction and the reputation of your practice. By understanding the root causes and implementing strategies to avoid these denials, you can better manage your revenue cycle and maintain a positive patient experience.

Deconstructing a CO-96 Denial: What Went Wrong and How to Fix It?

Example:

• Initial Billing:
  • CPT 97124: Massage Therapy
• Outcome: The claim was denied under CO-96 because massage therapy is not a covered service under the patient’s insurance plan.

Remedy:

1. Review the Denial Notice: Carefully examine the Explanation of Benefits (EOB) or Remittance Advice (RA) to confirm the reason for the denial.
2. Verify Coverage Details: Check the patient’s insurance policy or contact the payer to understand the specific coverage limitations.
3. Communicate with the Patient: Inform the patient about the denial and discuss alternative payment options or services that are covered by their plan.
4. Resubmit or Appeal (if applicable): If there’s a possibility of coverage under certain conditions or plans, resubmit the claim with the required adjustments or appeal with additional documentation justifying the medical necessity.

• Corrected Billing:
  • CPT 97124: Massage Therapy (with patient agreement to pay out-of-pocket if the service is not covered)

Actionable Steps: How to Address a CO-96 Denial

1. Analyze the Denial: Review the EOB or RA to pinpoint why the service was not covered.
2. Check Policy Details: Confirm whether the service is excluded, limited, or requires special conditions under the patient’s insurance plan.
3. Communicate Clearly: Engage with the patient to explain the situation and explore other covered options or alternative payment arrangements.
4. Resubmit with Adjustments (if eligible): If the service can be covered under specific circumstances, adjust and resubmit the claim accordingly.

Common Causes of CO-96 Denials

1. Policy Exclusions: Services that are explicitly excluded from the patient’s coverage plan.
2. Benefit Limitations: Exceeding the allowable number of visits or sessions for a specific therapy.
3. Non-Covered Services: Certain services, such as wellness or preventive treatments, may not be covered under standard plans.
4. Incorrect Service Codes: Using codes for services that are typically not covered under the patient’s insurance plan.

Proactive Prevention: Avoiding CO-96 Denials

Pre-Claim Submission Checklist:

• Verify Coverage: Confirm the patient’s insurance coverage for the specific services you plan to provide, especially for commonly non-covered services.
• Pre-Authorization: Obtain prior authorization from the payer for services that may be questionable under the patient’s plan.
• Patient Education: Discuss potential out-of-pocket costs with patients upfront if their insurance plan does not cover certain treatments.

Training and Best Practices:

• Train staff on checking insurance benefits and coverage limitations before providing services.
• Establish clear communication protocols with patients regarding their insurance benefits and potential out-of-pocket expenses.

Technology and Tools:

• Use verification tools that can quickly assess patient eligibility and coverage for specific services.
• Implement billing software that flags non-covered services before claim submission, allowing adjustments or alternative recommendations.

Conclusion: Effectively Managing CO-96 Denials to Protect Your Practice’s Revenue

Denial Code CO-96 can be a significant roadblock to getting paid for your services, but with careful management and proactive measures, you can minimize these denials. By understanding insurance coverage limitations, verifying benefits before service, and maintaining clear communication with patients, your practice can reduce the impact of non-covered service denials and improve overall financial stability.

Streamline Your Denial Management with SPRY

Navigating the complexities of CO-96 and other denials can be challenging, but SPRY’s comprehensive software solution is designed to help. From verifying coverage upfront to simplifying denial management, SPRY equips your practice with the tools needed to optimize billing processes and maximize reimbursements. Ready to take control of your revenue cycle? Schedule a demo with SPRY today and see how we can help you streamline your billing operations.

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