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CO-294 Denial Code: Payment Made to Attorney

CO-294 means the payer issued payment for the claim to an attorney rather than to the provider. It usually happens in injury cases handled by a lawyer. The claim was paid, so you need to recover the funds from the attorney or ask the payer to correct the payee.

Code: CO-294 (CARC 294)
Status: Active In use since November 1, 2017.
Code set: Claim Adjustment Reason Codes (CARC)
Group codes: CO (Contractual Obligation): The payer's usual group. The adjustment reflects money paid to someone else, not a patient cost-sharing amount.
OA (Other Adjustment): Some payers use OA since the adjustment only explains where the payment went.
Official description: Payment made to attorney.
X12 Claim Adjustment Reason Codes, retrieved September 25, 2026
Last verified: September 24, 2026 against the official X12 list.

What CO-294 means

CARC 294 says payment made to attorney. The payer paid the claim, but the check or transfer went to an attorney, usually the patient’s lawyer in an injury matter, rather than to the provider. The remittance shows the paid amount as an adjustment so the claim balances.

This mostly appears on remittances from auto, liability, and other property and casualty carriers, and occasionally from health plans involved in injury cases. It isn’t a coverage denial; it’s a question of who holds the money now.

Example: a patient injured in a car accident retains an attorney. The auto carrier processes the clinic’s bill and, at the attorney’s direction, pays the attorney’s trust account. The clinic receives a remittance showing CO-294 and must request the funds from the attorney.

Common causes

Attorney direction to route injury-related payments through the attorney’s office.
No assignment of benefits to the provider on file with the carrier.
Settlement processing, where medical payments are bundled into disbursements handled by the attorney.
Carrier rules for certain coverage types that permit payment to the claimant’s representative.

How to handle it

Identify the attorney and the case from the remittance or by calling the carrier.
Send the attorney a payment request with the remittance, itemized charges, and any lien or letter of protection you hold.
If you had an assignment, send it to the carrier and request reissue to your practice.
Track the account as an attorney receivable, separate from insurance and patient balances.
Escalate in writing if the attorney doesn’t respond, and consult counsel about your options under state law.

How to prevent it

Collect assignment of benefits on every injury case and send it to the carrier with the first bill.
Document attorney involvement at intake, including contact details and whether a lien or letter of protection applies.
Communicate early with the attorney’s office about how medical payments should be routed.
Monitor redirected payments. An ERA Analyzer can flag CO-294 lines for follow-up.

Specialty notes

Chiropractic, PT, orthopedic, and pain management practices treating accident patients see CO-294 most. Lien and letter-of-protection arrangements vary widely by state, so align your policies with legal guidance.

Remark codes that may appear with CO-294

N725 (A liability insurer has reported having ongoing responsibility for medical services (ORM) for this diagnosis.): A liability insurer has reported ongoing responsibility for the diagnosis, common in cases involving attorneys.

CO-293 (Payment made to employer.): Payment made to the employer instead of the provider.
CO-100 (Payment made to patient/insured/responsible party.): Payment made to the patient or responsible party.
CO-20 (This injury/illness is covered by the liability carrier.): The injury is covered by a liability carrier.
CO-215 (Based on subrogation of a third party settlement): Adjustment based on subrogation of a third-party settlement.

CO-294 FAQ

When do payers pay attorneys?

Mostly in personal injury, auto, liability, and some workers' compensation cases, when the patient's attorney directs that payments come to the attorney's trust account, or the payer's rules for that line of coverage allow it.

How do I get paid after CO-294?

Contact the attorney's office with the remittance and your itemized bill. If you have a lien or letter of protection, reference it. Payment typically comes from the attorney's trust account.

What if I had an assignment of benefits?

Send the payer a copy of the signed assignment and ask it to reissue payment to your practice. Keep records of all correspondence.

Can I bill the patient instead?

The payer considers the claim paid. Your remedy is usually with the attorney or through your lien or agreement. Check state rules on billing patients in active injury cases.

Important: read before using this information

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