Handling CO50 Denial Code
CO50 Denial Code
One of the most important parts of billing is handling denials. Thousands of dollars a year can be lost in providers’ offices that don’t handle denials. Learning the basics of denial management is essential to running an effective practice. Practices that perform well generally have denial rates below 5%. Let’s discuss how to handle CO50 denial code for Medicare as well as for Private Payers.
CO50 denial code, the sixth most frequent reason for Medicare claim denials, is defined as non-covered services because this is not deemed a medical necessity by the Payer. When this denial is received, it means Medicare does not consider the item that was billed as medically necessary for the patient.
A CO50 denial must be sent for re-determination, as it cannot be resubmitted. If you do not send the claim to redetermination within 120 days of the date of the denial, you have missed the timely filing deadline and will need to write off the claim.
Here are a few circumstances to be aware of:
- If a claim is billed to Medicare without a KX modifier, it will be denied with the CO50 denial code. When you add the KX modifier, that states to Medicare that the specified medical necessity documentation is on file within the patient’s medical record and that the patient meets the specified coverage criteria as outlined by the Local Coverage Determination.
- Sometimes when an oxygen concentrator (E1390) and an oxygen portable unit (E0431) are billed together, the concentrator will be paid and the portable unit will be denied with a CO50 code. This may occur due to the following answers on the CMN: 1) Question 3 was answered with “During Sleep,” or 2) Question 4 was answered with an N (no) or D (does not apply). Unless the doctor can prove that he/she answered those questions in error via proof in their chart notes and an additional letter stating their error, the claim will not be reimbursed.
- However, if you provided the portable system with knowledge of the impending denial, you should have received a signed ABN (Advanced Beneficiary Notice) at the time of delivery and added a GA modifier to the claim prior to submission. If the item was delivered and no ABN was obtained, then you cannot bill the patient.
The Insurance Company will deny the claim as CO50 – These are non-covered services because this is not deemed a medical necessity by the payer, whenever the procedure code is not compatible with the diagnosis code billed based on the LCD/NCD-Local Coverage determination/National Coverage determination guidelines.
First, we need to review whether the submitted diagnosis code is payable and billed as per LCD/NCD guidelines. If the billed diagnosis code is not payable, then we need to resubmit the claim with the correct diagnosis code based on LCD/NCD guidelines and resubmit a claim. If the diagnosis code submitted based on LCD and it supports the documentation then you have the right to appeal the claim along with supporting documentation.
Some of the reasons why the insurance company denies the claim with CO50 denial code:
- Times where your hospital service exceeds the insurance approved stay length.
- Physical therapy treatment that exceeds the Insurance usage limit.
- Suppose the Hospital/provider administered a treatment that could have been delivered in a cheaper cost setting.
- Prescription of drugs used for cosmetic services.
When you get the above denial it’s better to call the insurance claims department with the following questions for more information in order to resolve the claim:
- Check with the insurance representative whether the submitted CPT or Diagnosis code is not medically necessary.
- If everything needs to be correct as per LCD/NCD guidelines then check the appeal limit and address or else request for the fax# if option available to fax the appeal with MR notes.
- Claim Number
- Cal Reference Number
E2E Medical Billing Services specializes in proper billing protocols, Medicare coverage guidelines, and billing office procedures. We can assist you in increasing your revenue by addressing denials on the right time and in the right way. We have specialized ‘denials addressing’ team who will ensure that all the denials are properly addressed. To know more about our medical billing services you can call us at 888-552-1290 or write to us at [email protected]