Skip to main content

CO-144 Denial Code: Incentive Adjustment

CO-144 is an incentive adjustment, for example for a preferred product or service. The payer changed the payment, usually by adding an incentive, because the claim met the terms of a program that rewards certain choices.

Quick facts

Code
CO-144 (CARC 144)
Status
Active In use since June 30, 2001.
Code set
Claim Adjustment Reason Codes (CARC)
Group codes
  • CO (Contractual Obligation): The incentive is part of the payer-provider arrangement. It does not affect patient responsibility.
  • OA (Other Adjustment): Some payers use the other adjustment group for incentive amounts because they are neither a reduction nor patient liability.
Official description
Incentive adjustment, e.g. preferred product/service.
X12 Claim Adjustment Reason Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What CO-144 means

CARC 144 is an incentive adjustment, e.g. preferred product/service. Payers run programs that encourage providers to choose certain options: a preferred drug, a lower-cost generic, a preferred device, or a particular site of care. When a claim qualifies, the payer adjusts the payment, most often by adding an incentive, and reports it with CARC 144.

Because an incentive increases payment, the adjustment amount is usually negative on the ERA (a negative adjustment adds to what is paid). If your posting system treats every CARC as a reduction, it may post it backwards.

Example: a pharmacy dispenses a plan’s preferred product. The payer adds an incentive amount to the claim and reports it as CO-144.

Common causes

  • Dispensing or using a product on the payer’s preferred list under an incentive program.
  • Performing a service in a preferred setting that the payer rewards.
  • Participation in a program that pays per-claim incentives for certain choices.
  • A payer recouping an incentive paid earlier in error, which would appear as a positive adjustment.

How to fix it

  1. Check the sign of the amount. A negative CARC 144 adds to payment; a positive one reduces it.
  2. Confirm program participation and whether the claim should qualify.
  3. Post the incentive to a dedicated transaction code so it can be reconciled and reported.
  4. If an expected incentive is missing or the amount is wrong, contact the payer with the program terms and request reprocessing.
  5. Do not change patient responsibility based on CO-144.

How to prevent problems with CO-144

  • Keep a list of incentive programs you participate in, with qualifying products or services and amounts.
  • Configure your posting rules to handle negative adjustments correctly.
  • Track incentive income with an ERA Analyzer to confirm you are receiving what the programs promise.
  • When a program’s qualifying list changes, update staff guidance and system alerts the same day, so product or service choices keep matching what the payer rewards.
  • If an incentive is later recouped, ask the payer which claims it applies to and why, so you can fix the underlying qualification issue.
  • Report incentives separately from denials and write-offs. See how to read CARC and RARC codes.
  • CO-161 (Provider performance bonus): Provider performance bonus, an incentive tied to quality or performance rather than a product choice.
  • CO-245 (Provider performance program withhold.): Provider performance program withhold, the potential downside of the same kind of program.
  • CO-94 (Processed in Excess of charges.): Processed in excess of charges, which can accompany payments above the billed amount.
  • CO-103 (Provider promotional discount (e.g., Senior citizen discount).): Provider promotional discount, a reduction offered by the provider.

CO-144 FAQ

Is CO-144 good news?

Usually. It typically reflects extra payment for meeting an incentive program's terms, such as dispensing a preferred product. Check the sign of the amount on the remittance to confirm.

Why is an incentive reported as an adjustment?

The 835 needs every difference between the charge and the payment explained. An incentive changes that difference, so it gets its own adjustment code, often as a negative amount.

Do I need to do anything after CO-144?

Post it correctly and confirm it matches the program terms. No corrected claim or appeal is needed.