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CO-245 Code: Provider Performance Program Withhold

CO-245 means part of the payment was held back as a provider performance program withhold. Under many value-based contracts, a percentage of each payment is withheld and may later be returned, in whole or part, depending on how the provider performs against the program's measures.

Quick facts

Code
CO-245 (CARC 245)
Status
Active In use since September 30, 2012.
Code set
Claim Adjustment Reason Codes (CARC)
Group codes
  • CO (Contractual Obligation): The withheld amount is a contractual adjustment borne by the provider and cannot be billed to the patient. It may be reconciled later under the program.
Official description
Provider performance program withhold.
X12 Claim Adjustment Reason Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What CO-245 means

CARC 245 is a provider performance program withhold. Some contracts, particularly in managed care and value-based arrangements, hold back a portion of each claim payment. The withheld money goes into a pool that is settled later, based on how the provider or group performed on measures such as quality, utilization, or cost.

On the ERA, the claim looks almost paid in full: the allowed amount is calculated normally, patient cost sharing is applied, and then the withhold is subtracted from the payer’s payment and reported as CO-245. It is not a denial, and it is not a permanent write-off in every case. Whether you ever see the money again depends on your contract.

Example: a contract has a withhold on each payment. A claim with an allowed amount of $100 and no patient cost sharing pays slightly less than $100, and the difference is shown as CO-245. At year end, if targets are met, the payer may return some or all of the withheld total.

Common causes

  • Managed care contracts with a standard withhold on professional or facility payments.
  • Shared-risk or value-based programs that tie part of payment to measured outcomes.
  • Contract amendments that added or changed the withhold percentage.
  • Payer error applying a withhold to a provider or product that is not in the program.

How to fix it

  1. Confirm the contract includes a withhold for this product and date of service, and note the percentage.
  2. Check the calculation on a few claims to confirm the withhold matches the contract.
  3. If it does not match, or you are not in the program, contact the payer and request reprocessing.
  4. If it is correct, post it to a withhold tracking account so it can be reconciled.
  5. At settlement, compare the payer’s reconciliation report with your records and dispute any gaps under the contract’s process.

How to prevent problems

  • Keep a list of which contracts include withholds, the percentages, and the settlement dates.
  • Track withheld amounts by payer and year so the settlement can be checked.
  • Review the program’s measures and your performance reports during the year, not only at settlement.
  • Use an ERA Analyzer to total withholds across payments and spot ones applied outside the program.
  • Keep withholds out of denial metrics; they are payment timing and contract terms, not claim errors.

Remark codes that may appear with CO-245

  • N552 (Payment adjusted to reverse a previous withhold/bonus amount.): Appears when a later payment reverses a previous withhold or bonus amount.
  • N381 (Alert: Consult our contractual agreement for restrictions/billing/payment information related to these charges.): Points to the contract terms that define the withhold.
  • CO-144 (Incentive adjustment, e.g. preferred product/service.): An incentive adjustment, which increases payment rather than holding it back.
  • CO-278 (Performance program proficiency requirements not met. (Use only with Group Codes CO or PI)): Payment reduced because performance program proficiency requirements were not met.
  • CO-237 (Legislated/Regulatory Penalty.): A legislated or regulatory penalty, rather than a contractual withhold.
  • CO-45 (Charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement.): The ordinary fee schedule or contracted rate reduction.

CO-245 FAQ

Will I get a CO-245 withhold back?

Possibly. Withholds are usually reconciled at the end of a performance period, and some or all may be returned depending on your results and the contract terms.

Can I bill the patient for a withhold?

No. A withhold is a contractual arrangement between the provider and payer. The patient's cost sharing is calculated separately.

How should I post CO-245?

Many practices post it to a separate withhold receivable or adjustment code rather than a standard write-off, so it can be matched to the year-end reconciliation.

Does a withhold change the patient's cost sharing?

No. Deductible, coinsurance, and co-payment are calculated on the allowed amount before the withhold. The withhold only reduces what the payer sends the provider.