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CO-303 Denial Code: QMB Cost-Sharing Not Covered

CO-303 means the prior payer's patient responsibility (deductible, coinsurance, or copay) isn't covered for a Qualified Medicare Beneficiary (QMB), and X12 allows it only with group CO. Federal rules generally bar billing QMB patients for Medicare cost-sharing, so the amount is written off.

Quick facts

Code
CO-303 (CARC 303)
Status
Active In use since July 1, 2021.
Code set
Claim Adjustment Reason Codes (CARC)
Group codes
  • CO (Contractual Obligation): The only group X12 allows for this code. The provider absorbs the unpaid cost-sharing and can't bill the QMB patient for it.
Official description
Prior payer's (or payers') patient responsibility (deductible, coinsurance, co-payment) not covered for Qualified Medicare and Medicaid Beneficiaries. (Use only with Group Code CO)
X12 Claim Adjustment Reason Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What CO-303 means

CARC 303 says the prior payer’s (or payers’) patient responsibility (deductible, coinsurance, co-payment) is not covered for Qualified Medicare and Medicaid Beneficiaries, and X12 limits it to group code CO. It appears on the secondary remittance, usually from a state Medicaid program or Medicaid managed care plan, after Medicare processed the claim as primary.

The group code carries a legal point. QMB individuals are protected from paying Medicare Part A and Part B cost-sharing. When Medicaid pays less than the full deductible or coinsurance, which is common because states may cap payment at the Medicaid rate, the unpaid remainder can’t be passed to the patient. CO-303 makes that explicit.

Example: Medicare allows $100, pays $80, and assigns $20 coinsurance. The state Medicaid rate for the service is $75, lower than what Medicare already paid, so Medicaid pays nothing toward the coinsurance and reports the $20 as CO-303. The provider writes off the $20.

Common causes

  • State “lesser-of” payment policies limiting Medicaid’s share of Medicare cost-sharing.
  • Provider not enrolled with Medicaid, limiting the ability to receive Medicaid’s portion.
  • QMB status not recognized at registration, so staff expected to bill the patient.
  • Medicare Advantage plans where the member is also QMB-enrolled; cost-sharing protections still apply.

How to handle it

  1. Post the secondary remittance and write off the CO-303 amount as a non-billable adjustment.
  2. Review past collections for the patient; refund any Medicare cost-sharing collected, as remarks N781 to N783 advise.
  3. Stop patient statements for these balances and flag the account as QMB.
  4. Enroll with Medicaid if you serve many dual-eligible patients and aren’t enrolled, so crossover payments can reach you.
  5. Question the amount only if Medicaid’s calculation doesn’t follow the state’s published crossover rules.

How to prevent problems

  • Identify QMB status at registration. Medicare eligibility responses can indicate QMB enrollment, and state Medicaid systems show it too.
  • Flag QMB accounts so they never receive cost-sharing statements.
  • Train front desk staff not to collect Medicare deductibles or coinsurance from QMB patients.
  • Monitor crossover payments. An ERA Analyzer can separate CO-303 write-offs from collectible balances. See eligibility and COB denials.

Specialty notes

Practices with many dual-eligible patients, including primary care, behavioral health, and dialysis providers, write off CO-303 amounts routinely. Tracking them separately helps forecast reimbursement accurately.

Remark codes that may appear with CO-303

  • N781 (Alert: Patient is a Medicaid/ Qualified Medicare Beneficiary.): Alert that the patient is a Medicaid or QMB beneficiary; review records for any wrongly collected deductible.
  • N782 (Alert: Patient is a Medicaid/ Qualified Medicare Beneficiary.): Same alert for wrongly collected coinsurance.
  • N783 (Alert: Patient is a Medicaid/ Qualified Medicare Beneficiary.): Same alert for wrongly collected copayments.
  • N192 (Alert: Patient is a Medicaid/Qualified Medicare Beneficiary.): Alert that the patient is a Medicaid or Qualified Medicare Beneficiary.
  • PR-275 (Prior payer's (or payers') patient responsibility (deductible, coinsurance, co-payment) not covered. (Use only with Group Code PR)): The prior payer's patient responsibility isn't covered, the general version for non-QMB situations.
  • OA-23 (The impact of prior payer(s) adjudication including payments and/or adjustments. (Use only with Group Code OA)): The impact of the prior payer's adjudication on a secondary claim.
  • OA-209 (Per regulatory or other agreement.): Per regulatory or other agreement, the provider can't collect this amount from the patient.
  • CO-45 (Charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement.): Contractual reduction, which may also apply on the crossover claim.

CO-303 FAQ

What is a Qualified Medicare Beneficiary?

A QMB is a Medicare beneficiary enrolled in a Medicaid program that helps pay Medicare premiums and cost-sharing. Federal law prohibits Medicare providers from billing QMB individuals for Medicare deductibles, coinsurance, and copayments.

Why didn't Medicaid pay the full coinsurance?

Many state Medicaid programs pay Medicare cost-sharing only up to the Medicaid rate for the service, and pay nothing when Medicare's payment already exceeds that rate. The unpaid part is reported as CO-303 and can't be billed to the patient.

What if we already collected from a QMB patient?

Refund amounts collected for Medicare cost-sharing. Remarks N781 to N783 prompt you to review records for wrongly collected amounts.

Does the protection apply if I'm not enrolled in Medicaid?

The billing prohibition applies to all Medicare providers and suppliers, not only those who accept Medicaid. Providers not enrolled in Medicaid may have limited ability to get Medicaid's share, but still can't bill the patient.