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CO-264 Code: Pharmaceutical Postage Cost Adjustment

CO-264 is an adjustment for postage cost, used for pharmaceuticals only. The payer reduced or did not pay the postage billed for mailing a drug to the patient.

Quick facts

Code
CO-264 (CARC 264)
Status
Active In use since November 1, 2014; last modified July 1, 2017.
Code set
Claim Adjustment Reason Codes (CARC)
Group codes
  • CO (Contractual Obligation): Postage the payer did not reimburse is written off by the pharmacy under its contract; it generally is not billed to the patient.
  • PR (Patient Responsibility): Possible when a plan makes mailed delivery an optional member-paid service.
Official description
Adjustment for postage cost. Usage: To be used for pharmaceuticals only.
X12 Claim Adjustment Reason Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What CO-264 means

CARC 264 is an adjustment for postage cost, and the usage note limits it to pharmaceuticals. It appears when a pharmacy or supplier bills the cost of mailing a medication and the payer does not pay that amount in full.

Postage is the narrowest of the pharmaceutical cost codes. It covers mailing through a postal service, while carrier shipping has its own code, CO-263, and courier or staff delivery uses CO-262. Many pharmacy contracts treat mailing as a routine part of dispensing, so a separate postage charge commonly draws this adjustment.

In most cases the drug itself is paid; only the postage portion is adjusted. Check the rest of the claim line before assuming a denial.

Why payers adjust postage

  • Postage built into the dispensing fee under the pharmacy agreement.
  • No separate mailing benefit in the member’s plan.
  • Postage billed above an allowed flat amount.
  • Mail service provided by a network pharmacy whose contract excludes add-on charges.

A quick example

A mail-order pharmacy dispenses a 90-day supply and adds a small postage line to the claim. The plan pays the ingredient cost and dispensing fee in full and adjusts the entire postage line with CO-264 and a remark pointing to the pharmacy agreement. The postage amount is small, but multiplied across thousands of mailed prescriptions a year it becomes a noticeable write-off total, which is why pharmacies should decide deliberately whether to keep billing it.

What to do

  1. Look at the whole claim. Confirm the drug was paid and only postage was adjusted.
  2. Check your agreement for any postage or mailing reimbursement.
  3. If the contract pays postage, request reprocessing and cite the term.
  4. If it does not, post the write-off and turn off separate postage billing for that payer.
  5. If the payer reports PR, only charge the member if they were told about the cost in advance.

How to prevent problems

  • Keep a reimbursement matrix for dispensing-related costs (delivery, shipping, postage, administrative, compounding) by payer.
  • Build rules in your pharmacy system so postage lines are suppressed for payers that do not pay them.
  • Track small recurring adjustments; they add up over many prescriptions. See how to read CARC and RARC codes for posting guidance.

Remark codes that may appear with CO-264

  • N381 (Alert: Consult our contractual agreement for restrictions/billing/payment information related to these charges.): Indicates the contract governs whether postage is paid.
  • N130 (Consult plan benefit documents/guidelines for information about restrictions for this service.): Indicates plan documents govern postage coverage.
  • CO-263 (Adjustment for shipping cost.): Shipping cost, often commercial carrier charges rather than postal mailing.
  • CO-262 (Adjustment for delivery cost.): Delivery cost, such as courier delivery.
  • CO-265 (Adjustment for administrative cost.): Administrative cost associated with a pharmaceutical.

CO-264 FAQ

Why would a payer adjust postage?

Many pharmacy agreements consider mailing costs part of the dispensing fee. If postage is billed separately, the payer reports the unpaid part with CARC 264.

Is CO-264 a claim denial?

Usually it is a line-level cost adjustment, not a denial of the drug itself. The drug may be paid while postage is not.

Should I stop billing postage?

If the payer's contract does not reimburse postage separately, yes. Continuing to bill it just creates adjustments to post.

Can I bill postage as part of the dispensing fee instead?

Only as your contract allows. Dispensing fees are set by the agreement, so you cannot simply increase them; negotiate mailing costs into the contract if they matter to you.