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CO-5 Denial Code: Procedure Doesn't Match Place of Service

CO-5 means the payer found the procedure code (or, on institutional claims, the type of bill) inconsistent with the place of service reported. The service is not payable as billed in that setting; correct the place of service or code and resubmit.

Quick facts

Code
CO-5 (CARC 5)
Status
Active In use since January 1, 1995; last modified March 1, 2018.
Code set
Claim Adjustment Reason Codes (CARC)
Group codes
  • CO (Contractual Obligation): The standard group. The provider is responsible for the denied amount and should correct the claim rather than bill the patient.
  • PR (Patient Responsibility): Occasionally used when the patient is liable, for example with a valid advance notice for a non-covered setting. Confirm with the remark codes before billing.
Official description
The procedure code/type of bill is inconsistent with the place of service. Usage: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.
X12 Claim Adjustment Reason Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What CO-5 means

CARC 5 says the procedure code or type of bill is inconsistent with the place of service. On a professional claim (CMS-1500 or 837P), the place of service is the two-digit code in box 24B. On an institutional claim (UB-04 or 837I), the setting is expressed through the type of bill. When the procedure cannot logically or contractually be performed or paid in that setting, the payer denies the line.

Example: an inpatient-only hospital procedure billed with POS 11 (office), or a facility-based service billed as though the patient were at home. The code and the setting do not fit together, so the line returns CO-5, often with remark M77.

The usage note refers you to the 835 Healthcare Policy Identification segment. If the payer sends a policy ID there, it identifies the specific site-of-service rule applied.

Common causes

  • Telehealth POS mismatches. POS 02 or 10 used when the payer wants 11 plus modifier 95, or the reverse. Payer telehealth policies differ and change often.
  • Facility versus non-facility confusion. A service performed in a hospital outpatient department (POS 19 or 22) billed as office (POS 11).
  • Inpatient-only services billed with an outpatient or office POS.
  • Home and residential settings. Home (12), assisted living (13), nursing facility (32), or SNF (31) codes that do not match the service or the patient’s status on that date.
  • Default POS in the practice management system carried over from a template or a different location.
  • Type of bill errors on institutional claims, such as an outpatient procedure on an inpatient bill type.

How to fix it

  1. Confirm where the patient and provider actually were on the date of service, using the note, the scheduling record, and any facility records.
  2. Check the payer’s place-of-service and telehealth rules. Medicare’s POS code set and each payer’s telehealth policy define which codes they accept.
  3. Correct box 24B (or the type of bill), and the procedure code or modifier if the setting changes what should be billed.
  4. Submit a corrected claim with resubmission code 7 and the original claim number in box 22. If the claim was rejected at the front end and never adjudicated, send a new claim instead.
  5. Appeal only if the original POS was right and the payer misapplied its policy; include the policy citation and documentation.
  6. Do not bill the patient for a CO-5 amount.

How to prevent it

  • Map each practice location to its correct POS in your billing system and check new locations when they are added.
  • Keep a telehealth grid by payer showing required POS and modifiers, and review it whenever a payer updates its policy.
  • Flag inpatient-only and facility-only codes so they cannot go out with an office POS.
  • Scrub claims before submission. A Claims Validator can catch POS and code combinations that commonly deny.

Specialty notes

Behavioral health practices see CO-5 most often from telehealth: the same session may need POS 02, POS 10, or POS 11 with modifier 95 depending on the payer. Practices that see patients in nursing facilities should confirm POS 31 versus 32 based on the patient’s stay type on that date.

Remark codes that may appear with CO-5

  • M77 (Missing/incomplete/invalid/inappropriate place of service.): Missing, incomplete, invalid, or inappropriate place of service: the payer is pointing at box 24B.
  • N34 (Incorrect claim form/format for this service.): Incorrect claim form or format, for example a facility service billed on a professional claim.
  • N56 (Procedure code billed is not correct/valid for the services billed or the date of service billed.): The procedure code may be wrong for the setting, not the place of service.
  • CO-58 (Treatment was deemed by the payer to have been rendered in an inappropriate or invalid place of service.): The payer judged the setting inappropriate for the treatment, a coverage decision rather than a coding mismatch.
  • CO-282 (The procedure/revenue code is inconsistent with the type of bill.): Procedure or revenue code inconsistent with the type of bill on an institutional claim.
  • CO-171 (Payment is denied when performed/billed by this type of provider in this type of facility.): Denied when performed by this provider type in this type of facility.
  • CO-4 (The procedure code is inconsistent with the modifier used.): Procedure inconsistent with the modifier, common when telehealth modifiers and POS disagree.

CO-5 FAQ

What place of service should I use for telehealth?

Medicare and many payers use POS 02 for telehealth when the patient is not at home and POS 10 when the patient is at home, but some commercial and Medicaid plans require the in-person POS with a telehealth modifier instead. Check each payer's telehealth policy.

Is CO-5 a rejection or a denial?

It is a denial on the remittance: the claim was adjudicated and the line was not paid. Some clearinghouses and payers catch obvious POS problems earlier as front-end rejections, which you fix and resubmit as a new claim.

How do I fix a CO-5 denial?

Confirm where the service was actually performed, correct box 24B (or the type of bill on a UB-04) and the procedure code if needed, then send a corrected claim with resubmission code 7 in box 22.

Can a correct POS still get CO-5?

Yes, if the payer does not allow that procedure in that setting at all. In that case the code or setting is the issue, and you may need to review payer policy or appeal with documentation.