Look up another code

CO-86 Denial Code (Deactivated): Statutory Adjustment

CO-86 meant the payment was adjusted because of a statute. X12 deactivated it as duplicative of CARC 45, which covers amounts above a fee schedule, contracted rate, or legislated fee arrangement.

X12 deactivated CARC86 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.

Code: CO-86 (CARC 86)
Status: Deactivated StoppedOctober 16, 2003 (in use since January 1, 1995).
Code set: Claim Adjustment Reason Codes (CARC)
Group codes: CO (Contractual Obligation): The statutory reduction was a provider write-off, not billable to the patient.
Official description: Statutory Adjustment.
X12 Claim Adjustment Reason Codes, retrieved September 25, 2026
Last verified: September 24, 2026 against the official X12 list.

What CO-86 meant

CARC 86 flagged a reduction that the payer attributed to a statute rather than to a contract or its own fee schedule. For example, a law might set the maximum payment for a type of service. The remittance used code 86 to show the portion of the charge removed on that basis.

What replaced it

X12’s notes say the code was duplicative of code 45. CO-45 explicitly includes legislated fee arrangements, so it is the natural home for these reductions.

When a law requires an adjustment that is not a price limit, payers can use CO-223. Across-the-board federal payment cuts use CO-253.

If you still see CO-86

Expect it only in old remittance files. In reporting, combine it with your CARC 45 totals so that statutory and contractual pricing reductions are analyzed together. If you need to know which law was applied, ask the payer; the code alone never identified it.

CO-45 (Charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement.): X12 notes CO-86 was duplicative of this code, which includes legislated fee arrangements.
CO-223 (Adjustment code for mandated federal, state or local law/regulation that is not already covered by another code and is mandated before a new code…): Adjustment mandated by federal, state, or local law not covered by another code.
CO-253 (Sequestration - reduction in federal payment): Sequestration, a specific statutory reduction to federal payments.

CO-86 FAQ

Why was CO-86 considered a duplicate of CO-45?

CARC 45 covers reductions to a fee schedule, maximum allowable, or contracted or legislated fee arrangement. A statutory adjustment to price falls within that description, so a separate code was not needed.

Can the patient be billed for a statutory adjustment?

Generally no. It was reported under CO, meaning the provider absorbs it.

Important: read before using this information

This page is general educational information about a standard industry code set. It is not medical billing, coding, legal, reimbursement, or compliance advice, and it does not create a professional or advisory relationship with ClaimsRevenue.

Code definitions, payer usage, contracts, and laws change, and payers may apply the same code differently. The information is provided “as is,” without warranties of any kind, express or implied, including accuracy, completeness, or currency. You are solely responsible for verifying it against the current official X12 code lists, CMS guidance, your payer contracts, and payer policies before relying on it, and for every billing, coding, collection, and appeal decision you make.

Using this information does not guarantee that any claim will be paid or that any appeal will succeed. To the fullest extent permitted by law, ClaimsRevenue and MOODRX LLC are not liable for any loss or damage arising from its use. Official code descriptions are published by X12 and are quoted for reference only. See our full Claims Validation Disclaimer.