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CO-116 Denial Code: Advance Notice Not Compliant

CO-116 means the advance indemnification notice the patient signed, such as a Medicare ABN, did not comply with requirements. Because the notice is invalid, the payer shifts liability to the provider, and the patient generally cannot be billed for the denied service.

Code: CO-116 (CARC 116)
Status: Active In use since January 1, 1995; last modified September 30, 2007.
Code set: Claim Adjustment Reason Codes (CARC)
Group codes: CO (Contractual Obligation): Liability moves to the provider because the notice was defective. The denied amount is a write-off and should not be billed to the patient.
Official description: The advance indemnification notice signed by the patient did not comply with requirements.
X12 Claim Adjustment Reason Codes, retrieved September 25, 2026
Last verified: September 24, 2026 against the official X12 list.

What CO-116 means

CARC 116 says the advance indemnification notice signed by the patient did not comply with requirements. An advance notice (the Medicare Advance Beneficiary Notice of Noncoverage, or ABN, is the best known) tells the patient before a service that the payer may not pay and asks them to accept responsibility if it does not. When valid, it lets the provider bill the patient for a denied service.

With CARC 116 the payer is saying the notice existed but was defective. The claim was billed indicating a notice was on file, typically with a modifier such as GA for Medicare, and the payer rejected that notice. Liability falls to the provider.

Common causes

An outdated version of the notice form.
A blanket or routine notice given to every patient rather than a specific notice for services likely to be denied.
The service, the estimated cost, or the reason for expected denial missing or too generic.
The patient’s option selection or signature missing, or the date after the service.
The notice was given in circumstances that did not allow an informed choice, such as during an emergency or after the patient was already under sedation.
A notice used for a service that is statutorily excluded, where a different process or modifier is appropriate.

How to fix it

Pull the signed notice and compare it to the payer’s current instructions, form version, and required fields.
If the notice was valid, appeal with a copy of it and an explanation of how each requirement was met.
If the modifier was wrong but the notice is fine (for example, the wrong ABN-related modifier), ask the payer how to correct the claim; a corrected claim with resubmission code 7 in box 22 may be appropriate.
If the notice was defective, write off the charge. Refund any amount already collected from the patient for the service.
Do not replace the notice after the fact. A notice signed after the service does not meet requirements.

How to prevent it

Use the current official form, and remove outdated copies from every location.
Train front-desk staff on when a notice is required, how to complete each field, and how to explain it to the patient.
Make notices specific to the service and the reason the payer may deny it.
Store signed notices with the encounter so they can be produced on request.
Audit a sample of notices each quarter. For related denials, see medical claim denials and their preventable causes.

Remark codes that may appear with CO-116

MA13 (Alert: You may be subject to penalties if you bill the patient for amounts not reported with the PR (patient responsibility) group code.): Alert that you may face penalties if you bill the patient for amounts not reported as patient responsibility.

CO-50 (These are non-covered services because this is not deemed a 'medical necessity' by the payer.): Medical necessity denial, the most common situation where an ABN is used.
CO-96 (Non-covered charge(s).): General non-covered charges, which may be patient billable with a valid notice.
PR-204 (This service/equipment/drug is not covered under the patient's current benefit plan): Service not covered under the patient's benefit plan.
OA-209 (Per regulatory or other agreement.): The provider cannot collect from the patient under regulation or agreement.

CO-116 FAQ

What makes an ABN invalid?

Common problems include using an outdated form, leaving out the specific service or reason for expected denial, giving a blanket notice for all services, missing the patient's option choice or signature, or having it signed after the service or under duress.

Can I bill the patient after a CO-116?

No. The payer has found the notice defective, so liability stays with the provider. Billing the patient can create compliance risk.

Can I fix the ABN and resubmit?

Generally no. A notice must be valid when delivered, before the service. A new notice signed afterward does not cure the problem.

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