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CO-50 Denial Code: Not Medically Necessary

CO-50 means the payer considers the service non-covered because it doesn't meet the payer's definition of medical necessity, usually based on a coverage policy like a Medicare LCD or NCD. Under CO the provider absorbs the cost unless an appeal succeeds or a valid advance notice shifts liability to the patient.

Quick facts

Code
CO-50 (CARC 50)
Status
Active In use since January 1, 1995; last modified July 1, 2017.
Code set
Claim Adjustment Reason Codes (CARC)
Group codes
  • CO (Contractual Obligation): The standard group. The provider is liable and can't bill the patient, typically because no valid advance notice (such as a Medicare ABN) was obtained.
  • PR (Patient Responsibility): Used when the patient accepted financial responsibility in advance, for example with a properly executed ABN (often shown with modifier GA). You may bill the patient.
Official description
These are non-covered services because this is not deemed a 'medical necessity' by the payer. 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-50 means

CARC 50 says these are non-covered services because this is not deemed a “medical necessity” by the payer. The payer is saying that, under its rules, the service wasn’t reasonable and necessary for this patient’s condition. It’s not disputing that the service happened; it’s disputing whether the plan should pay for it.

Payers decide medical necessity using coverage policies. For Medicare, those are National Coverage Determinations (NCDs) and Local Coverage Determinations (LCDs) with their billing and coding articles. Commercial and Medicaid plans publish their own medical policies, often based on clinical criteria sets. The usage note points to the 835 Healthcare Policy Identification segment, which, when populated, names the exact policy applied. That reference is the most useful piece of information on the ERA for this denial.

The group code tells you who pays. CO-50 means the provider is liable, usually because no valid advance notice was given. PR-50 means the patient accepted responsibility in advance.

Common causes

  • Diagnosis doesn’t meet policy criteria, such as a service limited to certain conditions billed for another.
  • Missing supporting diagnoses that were documented but not coded in box 21 or linked in box 24E.
  • Frequency limits in the policy, such as a test covered once in a set period.
  • Required prerequisites not documented, such as conservative treatment before a procedure or imaging.
  • Documentation too thin to show why the service was needed, found on records review.
  • Screening performed without symptoms when the policy covers the test only as diagnostic.
  • No advance notice obtained for a service known to be at risk of non-coverage.

How to fix it

  1. Find the policy. Check the 835 REF segment and remark codes (N115 for LCDs, N386 for NCDs). Pull the current version for the date of service.
  2. Compare the record to each criterion. Diagnoses, history, prior treatments, test results, and frequency.
  3. If documented diagnoses were missing, send a corrected claim with resubmission code 7 in box 22, adding them and fixing pointers.
  4. If the claim was right, appeal or request reconsideration with the relevant records and a short letter explaining how the patient met the policy.
  5. Use peer-to-peer review where the payer offers it.
  6. Check liability before billing. Bill the patient only if the payer reports PR, for example after a valid ABN. Otherwise write off after appeals are exhausted.

How to prevent it

  • Check coverage policies before scheduling services that are frequently denied, such as certain labs, imaging, injections, and therapies.
  • Capture every relevant diagnosis documented by the provider, coded to the highest specificity.
  • Document the “why.” Notes should show symptoms, failed treatments, and the reason for the service.
  • Use advance notices correctly. For Medicare, give an ABN when you expect a service may not meet coverage, and append the right modifier.
  • Screen claims against coverage rules. A Claims Validator can flag diagnosis and procedure combinations that often fail medical necessity edits.

For more on preventable causes behind medical necessity denials, see preventable medical claim denials.

Specialty notes

Behavioral health practices see CO-50 on continued treatment when documentation doesn’t show ongoing need or progress, and on higher levels of care. PT/OT practices see it when plans of care, functional goals, or progress notes aren’t documented as the payer requires. DME suppliers see it when the medical records don’t meet the item’s coverage criteria.

Remark codes that may appear with CO-50

  • N115 (This decision was based on a Local Coverage Determination (LCD).): The decision was based on a Local Coverage Determination. Check the LCD and its billing article for covered diagnoses and criteria.
  • N386 (This decision was based on a National Coverage Determination (NCD).): The decision was based on a National Coverage Determination.
  • M25 (The information furnished does not substantiate the need for this level of service.): The information submitted doesn't support this level of service.
  • N661 (Documentation does not support that the services rendered were medically necessary.): Documentation doesn't support that the services were medically necessary.
  • N130 (Consult plan benefit documents/guidelines for information about restrictions for this service.): Points to plan documents for the payer's coverage restrictions.
  • CO-11 (The diagnosis is inconsistent with the procedure.): Diagnosis inconsistent with the procedure, a coding-level edit that often looks like a medical necessity denial.
  • CO-55 (Procedure/treatment/drug is deemed experimental/investigational by the payer.): Experimental or investigational, a specific non-coverage reason.
  • CO-56 (Procedure/treatment has not been deemed 'proven to be effective' by the payer.): Not proven to be effective, another specific reason.
  • CO-150 (Payer deems the information submitted does not support this level of service.): The information doesn't support the level of service billed, rather than the service itself.
  • CO-151 (Payment adjusted because the payer deems the information submitted does not support this many/frequency of services.): The information doesn't support this many services or this frequency.
  • CO-167 (This (these) diagnosis(es) is (are) not covered.): The diagnosis isn't covered.

CO-50 FAQ

Can I bill the patient for CO-50?

Not under CO. For Medicare, you can bill the patient only if a valid ABN was signed before the service and the claim carried the correct modifier, in which case the payer reports PR. Commercial plans have their own advance notice rules and contract terms.

What's the difference between CO-50 and CO-11?

CO-11 is usually an automated edit: the diagnosis linked to the line isn't on the payer's list for that service. CO-50 is a broader medical necessity decision, sometimes made after reviewing records. Fixing a diagnosis pointer may resolve CO-11; CO-50 more often needs an appeal.

How do I appeal a CO-50 denial?

Identify the policy used, then send records that show how the patient met each criterion: symptoms, history, prior treatments, test results, and the clinician's rationale. A letter of medical necessity can help tie the evidence to the policy.

Should I send a corrected claim or an appeal?

A corrected claim only if something on the claim was wrong, such as a missing supporting diagnosis that was documented. If the claim was accurate and the payer disagrees on necessity, appeal.