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CO-135 Denial Code: Interim Bills Not Processed

CO-135 means interim bills cannot be processed. The payer does not accept partial claims for part of a stay or episode, so it rejected the interim bill. You usually need to wait until the stay ends and submit one complete claim.

Quick facts

Code
CO-135 (CARC 135)
Status
Active In use since October 31, 1998; last modified September 30, 2007.
Code set
Claim Adjustment Reason Codes (CARC)
Group codes
  • CO (Contractual Obligation): The provider must resubmit correctly. The amount is not billable to the patient.
Official description
Interim bills cannot be processed.
X12 Claim Adjustment Reason Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What CO-135 means

CARC 135 says interim bills cannot be processed. It mostly affects institutional claims. On a UB-04 or 837I, the third digit of the type of bill (the frequency code) says whether the claim covers an entire stay or only part of it. Interim bills report part of a stay, usually during a long admission. When a payer does not accept them for the claim type, it returns CARC 135.

The service is not being denied on its merits. The payer is telling you to bill differently.

Example: a hospital sends an interim claim for the first 30 days of a long inpatient admission. The payer only accepts admit-through-discharge claims for that type of stay and returns CO-135. The hospital waits for discharge and sends one complete claim.

Common causes

  • An interim frequency code used for a payer that requires admit-through-discharge billing.
  • Interim bills submitted more often, or earlier, than the payer allows.
  • The wrong frequency code on a claim meant to be complete.
  • Interim billing rules that apply to some facility types (for example, long-term care) but not others.
  • A final bill sent without first reconciling the interim bills already submitted.

How to fix it

  1. Check the type of bill on the claim and the payer’s rules for interim billing for that facility and stay type.
  2. If the payer requires a complete claim, wait for discharge and submit a single admit-through-discharge claim as a new claim.
  3. If the frequency code was simply wrong, correct it and resubmit.
  4. If the payer allows interim bills, confirm you followed its timing rules and request reprocessing.
  5. Keep the stay on a monitoring list so the final claim goes out promptly after discharge.

How to prevent it

  • Keep a payer matrix showing which payers accept interim bills and for which facility types.
  • Set billing system rules that hold claims for inpatient stays until discharge for payers that do not accept interim billing.
  • Validate the type of bill frequency code before submission. A Claims Validator can flag mismatches.
  • For the difference between front-end rejections and denials, see claim rejection vs. denial.

Specialty notes

Hospitals, skilled nursing facilities, and long-term care facilities are the main audience for this code. Professional claims do not use interim billing.

  • CO-268 (The Claim spans two calendar years.): The claim spans two calendar years and must be split, a situation that sometimes requires separate bills.
  • CO-267 (Claim/service spans multiple months.): The claim spans multiple months, which some payers require to be split.
  • OA-18 (Exact duplicate claim/service (Use only with Group Code OA except where state workers' compensation regulations requires CO)): Duplicate claim, which can result if interim and final bills overlap.
  • CO-16 (Claim/service lacks information or has submission/billing error(s).): General missing or invalid claim information, sometimes used for type of bill errors.

CO-135 FAQ

What is an interim bill?

A claim for part of an ongoing stay or episode, submitted before the patient is discharged or the episode ends. On institutional claims it is identified by the type of bill frequency code.

Which payers accept interim bills?

Some payers accept interim bills for long inpatient stays under specific rules, while others require only admit-through-discharge claims. Check each payer's institutional billing guidelines.

Should I appeal CO-135?

No. Submit the claim in the format the payer accepts, usually a single admit-through-discharge claim after the stay ends.