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CO-120 Denial Code (Deactivated): Managed Care Plan

CO-120 meant the patient was covered by a managed care plan, so this payer did not pay the claim as billed. X12 deactivated it and its notes direct payers to use CARC 24 instead.

X12 deactivated CARC120 on June 30, 2007. Payers should no longer use it on new remittances, but it can still appear on older ERAs, corrected claims, and appeals.

Quick facts

Code
CO-120 (CARC 120)
Status
Deactivated StoppedJune 30, 2007 (in use since January 1, 1995).
Code set
Claim Adjustment Reason Codes (CARC)
Group codes
  • CO (Contractual Obligation): The provider had to seek payment from the managed care plan or absorb the amount under its arrangement.
Official description
Patient is covered by a managed care plan.
X12 Claim Adjustment Reason Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What CO-120 meant

CARC 120 came up when a claim went to a payer, often a state Medicaid program or traditional Medicare, but the patient was enrolled in a managed care plan for that date. The payer that received the claim would not pay it directly because the managed care plan was responsible.

What replaced it

X12’s notes say to use code 24. OA-24 covers charges handled under a capitation agreement or managed care plan. If the claim should go to a different payer entirely, you may see CO-109, or CO-B11 when the payer forwarded the claim for you.

If you still see CO-120

It should only appear in old remittance data. For the claim, run eligibility for the date of service to find the managed care plan and its claims address or payer ID, then submit the claim there within that plan’s filing limit.

If you are a capitated provider for that member, confirm whether the service is included in the capitation payment. If so, the claim is informational and the balance is not collectible from the patient or the plan.

  • OA-24 (Charges are covered under a capitation agreement/managed care plan.): The replacement X12 names: charges covered under a capitation agreement or managed care plan.
  • CO-109 (Claim/service not covered by this payer/contractor.): Not covered by this payer; send the claim to the correct payer.
  • CO-B11 (The claim/service has been transferred to the proper payer/processor for processing.): The claim has been transferred to the proper payer for processing.

CO-120 FAQ

What does OA-24 or CO-24 mean compared with CO-120?

CARC 24 covers the same idea: the charge falls under a capitation arrangement or managed care plan, so fee-for-service payment is not made. X12 retired 120 in its favor.

What is the usual fix?

Check eligibility to find the managed care organization responsible on the date of service, then bill that plan. If you are paid by capitation for the patient, the claim may be for reporting only.