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CO-258 Denial Code: Patient in Custody or Incarcerated

CO-258 means the claim or service is not covered because the patient was in custody or incarcerated on the date of service. The official text notes that the applicable federal, state, or local authority may cover the service instead.

Quick facts

Code
CO-258 (CARC 258)
Status
Active In use since November 1, 2013.
Code set
Claim Adjustment Reason Codes (CARC)
Group codes
  • CO (Contractual Obligation): The payer will not pay, and the provider should pursue the responsible authority. The amount generally should not be billed to the patient without checking the correct payer first.
  • OA (Other Adjustment): Some payers report it as OA because the liability belongs to a third party, such as a correctional authority.
Official description
Claim/service not covered when patient is in custody/incarcerated. Applicable federal, state or local authority may cover the claim/service.
X12 Claim Adjustment Reason Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What CO-258 means

CARC 258 says the claim or service is not covered when the patient is in custody or incarcerated. Applicable federal, state, or local authority may cover the claim or service. The payer’s records show that on the date of service, the patient was under the custody of a correctional or law enforcement authority.

Health plans, especially Medicare and Medicaid, have rules limiting payment for people in custody, on the principle that the custodial authority is responsible for their care. The official text points you in that direction: the jail, prison, or agency may pay instead.

Custody status is often reported by government data matches, which can lag or contain errors, so CO-258 is sometimes wrong about the dates.

Common causes

  • Patient in jail or prison on the date of service, including hospital care outside the facility.
  • Patient in police custody at the time of an emergency visit.
  • Outdated custody data after the patient was released.
  • Identity mix-up where another person’s custody record was matched to the patient.

How to fix it

  1. Confirm custody status on the date of service by asking the patient (if possible) or the facility, and check the registration notes.
  2. If the patient was in custody, identify the responsible authority and bill it or its contracted health vendor according to its process.
  3. If Medicaid covers the inpatient stay under the exception for inmates admitted to an outside hospital, confirm the state’s process and bill accordingly.
  4. If the patient was not in custody, gather release documentation and ask the payer to correct its records and reprocess. Appeal if needed.
  5. Hold patient billing until the correct payer is determined.

How to prevent it

  • In emergency departments, capture whether the patient arrived in custody and which agency was involved.
  • Set up billing contacts with local jails, prisons, and their health vendors.
  • For recently released patients, verify eligibility carefully and keep release documents if provided.
  • Track CO-258 claims separately so they are routed to the right authority promptly.

Specialty notes

Emergency departments, hospitals near correctional facilities, and ambulance services see this code most often. For ambulance transport of someone in custody, the agency requesting the transport may be responsible.

Remark codes that may appear with CO-258

  • N103 (Records indicate this patient was a prisoner or in custody of a Federal, State, or local authority when the service was rendered.): The payer's records show the patient was a prisoner or in custody of a federal, state, or local authority when the service was provided.
  • CO-109 (Claim/service not covered by this payer/contractor.): The claim should be sent to a different payer or contractor.
  • CO-177 (Patient has not met the required eligibility requirements.): The patient did not meet eligibility requirements for another reason.
  • PR-27 (Expenses incurred after coverage terminated.): Coverage had terminated before the service.

CO-258 FAQ

Why won't Medicare or Medicaid pay for incarcerated patients?

Federal rules generally bar Medicare payment for people in custody under a penal statute, and Medicaid generally cannot pay for inmates except for certain inpatient stays outside the facility. Responsibility usually falls to the custodial authority.

Who do I bill after CO-258?

Contact the correctional facility, jail, or agency that had custody on the date of service. Many have a contracted health vendor or a specific billing process.

What if the patient was released before the service?

Payer custody records are sometimes out of date. Get proof of the release date and ask the payer to update its records and reprocess the claim.

Can the patient be billed if the authority refuses to pay?

Check state law and your policies first. Some jurisdictions limit billing people who were in custody, and some authorities cover only certain services. Document the authority's decision before any patient billing.