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CO-78 Denial Code: Non-Covered Days or Room Charge

CARC 78 is an adjustment for non-covered days or room charges on a facility claim. The payer isn't paying for certain inpatient days, or it's reducing room charges, for example a private room billed without medical necessity.

Quick facts

Code
CO-78 (CARC 78)
Status
Active In use since January 1, 1995.
Code set
Claim Adjustment Reason Codes (CARC)
Group codes
  • CO (Contractual Obligation): The provider absorbs the adjustment, often for days denied on review or room charges above the contracted rate. The patient isn't billed.
  • PR (Patient Responsibility): Used when the patient is responsible, such as a private room the patient requested for comfort after being informed of the cost, or days after proper notice of non-coverage.
Official description
Non-Covered days/Room charge adjustment.
X12 Claim Adjustment Reason Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What CARC 78 means

CARC 78 covers two related adjustments on institutional claims: non-covered days and room charge adjustments.

Non-covered days are inpatient days the payer won’t pay. They may have been denied on utilization review, fallen outside the authorized stay, exceeded a benefit limit, or involved a patient waiting for discharge to a lower level of care. On per-diem contracts, each non-covered day directly reduces payment. On case-rate contracts, they can affect outlier calculations.

Room charge adjustments reduce room and board charges, most often when a private room is billed but the payer pays only the semi-private rate because the private room wasn’t medically necessary.

The group code decides who pays. Under CO, the facility absorbs it. Under PR, the patient may owe it, typically after receiving proper notice.

Common causes

  • Days denied on concurrent or retrospective review.
  • Stay extended beyond the authorized days without an approved extension.
  • Discharge delays for placement, transportation, or family arrangements.
  • Private room differentials without documented medical necessity, such as isolation.
  • Room rate billed above the contracted room and board rate.
  • Non-covered days misreported in value or occurrence span codes on the claim.

How to fix it

  1. Match the non-covered days to the stay and your utilization review records.
  2. Appeal denied days with physician documentation for each date in question.
  3. Correct claim coding if non-covered days or room rates were reported wrong, then submit an adjusted claim using the payer’s process.
  4. Check room charge reductions against your contract rates.
  5. Bill the patient only for PR amounts where required notices were given.

How to prevent it

  • Keep authorizations current through concurrent review, requesting extensions before days lapse.
  • Document daily medical necessity for inpatient stays.
  • Start discharge planning early to limit placement delays.
  • Document the reason for private rooms, such as isolation needs.
  • Report non-covered days accurately. See authorization and referral denials.

Specialty notes

Psychiatric hospitals, rehabilitation facilities, and long-term acute care hospitals often see CARC 78 on long stays where continued-stay reviews are frequent.

Remark codes that may appear with CO-78

  • MA33 (Missing/incomplete/invalid non-covered days during the billing period.): Non-covered days during the billing period are missing, incomplete, or invalid on the claim.
  • N153 (Missing/incomplete/invalid room and board rate.): The room and board rate is missing or invalid.
  • CO-202 (Non-covered personal comfort or convenience services.): Non-covered personal comfort or convenience services.
  • CO-50 (These are non-covered services because this is not deemed a 'medical necessity' by the payer.): Not medically necessary, which often underlies denied days.
  • CO-186 (Level of care change adjustment.): Level of care change adjustment, for days paid at a lower level.
  • CO-69 (Day outlier amount.): Day outlier amount, which non-covered days can reduce.

CO-78 FAQ

What are non-covered days?

Inpatient days the payer won't pay, for example days that didn't meet medical necessity, days waiting for placement at a lower level of care, or days beyond a benefit limit.

Can I bill the patient for a private room?

Generally only when the patient requested it for comfort, the room wasn't medically necessary, and the patient was told about the cost in advance. If a private room was medically necessary or the only room available, payers typically cover it at the semi-private rate.

How do I dispute denied days?

Review the utilization review record for each day, then appeal with physician documentation that supports the need for continued inpatient care on those dates.

Do non-covered days affect physician claims?

CARC 78 is a facility adjustment. Physician visits on those days are billed separately and may be reviewed on their own merits.