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CO-41 Denial Code (Deactivated): PPO Contract Discount

CO-41 meant the payment was reduced by a discount the provider had agreed to in a Preferred Provider Organization contract. X12 deactivated it without naming a successor; these reductions are now reported with CARC 45 or, for claim-specific deals, CARC 131.

X12 deactivated CARC41 on October 16, 2003. Payers should no longer use it on new remittances, but it can still appear on older ERAs, corrected claims, and appeals.

Quick facts

Code
CO-41 (CARC 41)
Status
Deactivated StoppedOctober 16, 2003 (in use since January 1, 1995).
Code set
Claim Adjustment Reason Codes (CARC)
Group codes
  • CO (Contractual Obligation): The discount was a contractual write-off the provider agreed to, not an amount the patient owed.
Official description
Discount agreed to in Preferred Provider contract.
X12 Claim Adjustment Reason Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What CO-41 meant

CARC 41 explained a reduction that came from a PPO agreement. When a provider joins a Preferred Provider Organization, it agrees to accept discounted rates in exchange for access to the network’s members. Code 41 showed the size of that agreed discount on the remittance.

It was purely informational in the sense that nothing was wrong with the claim. The payer was simply applying the rate the provider had signed up for.

What replaced it

X12 did not name a replacement. In practice, commercial payers now fold this reduction into CO-45, the charge-exceeds-fee-schedule code. When a discount was negotiated for one particular claim, often by a third-party repricer, you will see CO-131. Property and casualty payers have a PPO-specific option, CO-P24.

If you still see CO-41

Most likely it is in historic data you are reconciling or in a legacy report. The accounting is unchanged: post it as a contractual write-off.

The one thing worth checking is whether the discount matches your PPO agreement. Rental networks and silent-PPO arrangements can apply discounts you did not expect, so confirm which network priced the claim and whether you are contracted with it. If the discount looks wrong, ask the payer which network agreement it used.

  • CO-45 (Charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement.): The standard active code for reductions to a contracted or fee schedule amount.
  • CO-131 (Claim specific negotiated discount.): A discount negotiated for one specific claim, such as through a repricing network.
  • CO-P24 (Payment adjusted based on Preferred Provider Organization (PPO).): PPO-based adjustment for property and casualty claims only.

CO-41 FAQ

Is a CO-41 amount collectible from the patient?

No. It represented a discount the provider accepted by joining the PPO network, so it is written off like any other contractual adjustment.

Why don't payers use a separate PPO discount code anymore?

CARC 45 already covers any reduction to a contracted amount, so a separate PPO code added little. Claim-specific negotiated discounts have their own code, 131.