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CO-196 Denial Code (Deactivated): Prior Payer's Coverage

CO-196 meant a secondary payer denied the claim because of a coverage decision made by the prior payer. X12 deactivated it soon after creating it, and its notes direct payers to use code 136.

X12 deactivated CARC196 on February 1, 2007. Payers should no longer use it on new remittances, but it can still appear on older ERAs, corrected claims, and appeals.

Code: CO-196 (CARC 196)
Status: Deactivated StoppedFebruary 1, 2007 (in use since June 30, 2006).
Code set: Claim Adjustment Reason Codes (CARC)
Group codes: CO (Contractual Obligation): The provider was expected to resolve the prior payer's denial rather than bill the patient.
Official description: Claim/service denied based on prior payer's coverage determination.
X12 Claim Adjustment Reason Codes, retrieved September 25, 2026
Last verified: September 24, 2026 against the official X12 list.

What CO-196 meant

CARC 196 appeared on a secondary payer’s remittance. The primary had denied the service, and the secondary based its own denial on that coverage decision instead of paying as if it were primary. It was in use for only a short time before X12 retired it.

What replaced it

X12’s note says to use code 136. OA-136 reports a failure to follow the prior payer’s coverage rules and is limited to the OA group. A closely related active code, CO-276, says the secondary does not cover services the prior payer denied. The overall effect of the primary’s processing appears as OA-23.

If you still see CO-196

It will be limited to older secondary remittances. Go back to the primary’s denial and work out whether it can be fixed, for example by obtaining a missing authorization or correcting a coding error. Once the primary pays or issues a corrected decision, rebill the secondary with the new primary remittance attached.

OA-136 (Failure to follow prior payer's coverage rules. (Use only with Group Code OA)): Named replacement: failure to follow the prior payer's coverage rules, used with group OA.
CO-276 (Services denied by the prior payer(s) are not covered by this payer.): Services denied by the prior payer are not covered by this payer.
OA-23 (The impact of prior payer(s) adjudication including payments and/or adjustments. (Use only with Group Code OA)): Impact of prior payer adjudication, including payments and adjustments.

CO-196 FAQ

Why would a secondary payer follow the primary's denial?

Many plans will not pay as secondary if the primary denied because the provider did not follow its rules, such as authorization or network requirements. The secondary expects those rules to be met first.

What is the difference between CARC 136 and CARC 276?

CARC 136 says the prior payer's coverage rules were not followed. CARC 276 says the secondary plan does not cover services the prior payer denied.

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