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CO-246 Code: Non-Payable Reporting-Only Code

CO-246 means the billed code is non-payable and was submitted for required reporting only. Codes such as quality-measure or tracking codes carry no payment, so the payer adjusts the line to zero and reports CARC 246.

Quick facts

Code
CO-246 (CARC 246)
Status
Active In use since September 30, 2012.
Code set
Claim Adjustment Reason Codes (CARC)
Group codes
  • CO (Contractual Obligation): Any charge on the line is adjusted off. It is not billable to the patient.
Official description
This non-payable code is for required reporting only.
X12 Claim Adjustment Reason Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What CO-246 means

CARC 246 says this non-payable code is for required reporting only. Some codes exist to report information, not to bill for a service. CPT Category II codes used for quality measures, certain HCPCS G-codes used for quality or functional reporting, and some payer-specific tracking codes all fall into this group. They go on claims so the payer can collect data, but they never pay.

When one of these lines comes back, the payer adjusts any amount on it and uses CARC 246 to confirm that it treated the line as reporting-only. That is the expected outcome. In fact, a CO-246 line is evidence that your reporting code was received, which can matter for quality programs that rely on claims-based reporting.

Example: a practice reports a quality measure by adding a Category II code with a $0.01 charge. The ERA shows the line with no payment and CO-246 for $0.01.

Common causes

  • Quality measure codes reported for Medicare or commercial quality programs.
  • Tracking or informational codes required by Medicaid or a managed care plan.
  • Required reporting modifiers or codes tied to a demonstration or program.

How to handle it

  1. Confirm the line is a reporting code. If it is, no action is needed beyond posting the zero payment and small adjustment.
  2. Check remark codes. If N565 appears, the reporting code needed a modifier; add it on future claims so the measure counts.
  3. If a payable service was denied with CO-246, the payer may have misread the code. Verify the code on the claim and request reprocessing if it was a billable service.
  4. Do not bill the patient for reporting lines.

How to prevent problems

  • Keep a list of reporting-only codes you use and the charge amount your system should attach.
  • Set posting rules that auto-adjust CO-246 lines, so they never land in denial queues.
  • Confirm reporting codes include any required modifiers, so quality data is accepted.
  • Separate reporting codes from service codes in charge capture to avoid mistakes that turn billable services into non-payable ones.

For a broader explanation of informational versus denial codes, see how to read CARC and RARC codes.

Remark codes that may appear with CO-246

  • N620 (Alert: This procedure code is for quality reporting/informational purposes only.): Confirms the procedure code is for quality reporting or informational purposes only.
  • N565 (Alert: This non-payable reporting code requires a modifier.): The reporting code needs a modifier, and future claims must include one.
  • CO-234 (This procedure is not paid separately.): A payable-type procedure that is not paid separately, unlike a code that is never payable.
  • CO-97 (The benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated.): The service is included in the payment for another service.
  • CO-96 (Non-covered charge(s).): A non-covered charge; the service could be payable in other circumstances.

CO-246 FAQ

Why is there a CO-246 line on my ERA?

You billed a reporting-only code, such as a quality measure code. The payer accepted it for reporting and adjusted it to zero, which is normal.

Should I put a charge on reporting codes?

Many billers use a nominal charge, such as $0.00 or $0.01, depending on what their system and payer accept. Check the payer's instructions, since some systems reject lines with no charge.

Is CO-246 a denial I need to work?

No. It confirms the reporting code was received. Remove it from your denial work queues.

Do reporting-only codes count for quality programs if they show CO-246?

Receiving CO-246 usually means the code was accepted for reporting. Whether it counts toward a specific measure depends on the program's rules, including correct codes, modifiers, and eligible encounters.