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CO-96 Denial Code: Non-Covered Charges

CO-96 means the payer considers the charge non-covered. X12 requires at least one remark code with it, and that remark code (or the policy reference on the 835) explains why. Under CO, the provider generally absorbs the amount unless the patient agreed in advance to pay.

Code: CO-96 (CARC 96)
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 payer holds the provider liable for the non-covered charge. Without a valid advance notice or waiver the patient generally cannot be billed, and in-network contracts often prohibit it.
PR (Patient Responsibility): The service is excluded under the patient's benefits and the patient is responsible, often because they were informed in advance or the plan simply excludes it. Check the plan and any signed notice before billing.
PI (Payer Initiated Reduction): The payer initiated the non-coverage determination, usually under its own policy. Whether the patient can be billed depends on the contract, plan terms, and any advance notice.
Official description: Non-covered charge(s). At least one Remark Code must be provided (may be comprised of either the NCPDP Reject Reason Code, or Remittance Advice Remark Code that is not an ALERT.) 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: September 24, 2026 against the official X12 list.

What CO-96 means

CARC 96 is the general non-covered charge(s) code. The payer is saying it will not pay for this service under the patient’s coverage or its policies. The code on its own is deliberately vague, so X12 requires at least one remark code with it, and the payer may also point to a specific medical policy in the 835’s healthcare policy segment (loop 2110 REF).

The group code tells you who carries the cost:

CO-96: provider liability. You generally cannot bill the patient unless they agreed in writing before the service.
PR-96: patient liability, typically because the plan excludes the service.
PI-96: a payer-initiated coverage determination, often based on internal policy.

Example: a patient has a service the plan’s certificate of coverage excludes. The ERA shows CO-96 with remark N130. Because the practice did not collect a signed financial waiver, the charge becomes a write-off.

Common causes

The service is a benefit exclusion under the patient’s plan (cosmetic, certain wellness services, hearing aids, and similar categories vary by plan).
The service is statutorily excluded, for example items Medicare does not cover by law.
The payer’s medical policy covers the service only for certain diagnoses, frequencies, or places of service, and the claim fell outside those limits.
The wrong procedure code or a missing modifier made a covered service look like a non-covered one.
A diagnosis in box 21 or the diagnosis pointer in box 24E does not support coverage under the payer’s policy.
The patient’s plan changed and the new plan excludes a service the old one covered.

How to fix it

Read every remark code and policy reference. They define the actual problem. Without them, call provider services for the specific reason.
If coding caused it, submit a corrected claim with resubmission code 7 in box 22 and the original claim number. Examples include a wrong code, a missing modifier, or a diagnosis pointer aimed at the wrong diagnosis.
If you met the policy criteria, file a reconsideration or appeal with records that show each criterion was met. Cite the policy by name.
If it is a true exclusion, check for a signed advance notice. For Medicare, a valid ABN with the correct modifier (GA) supports billing the patient. For other payers, follow the contract and the patient’s signed waiver.
If no valid notice exists and the group is CO, write the charge off. Do not bill the patient.
For PR-96, bill the patient according to plan terms, your financial policy, and applicable balance-billing laws.

How to prevent it

Verify benefits for services that are commonly excluded or limited, and document what the payer told you.
Use advance notices (ABN for Medicare, payer-approved waivers for others) consistently when coverage is doubtful. Add the right modifiers, such as GA, GX, or GZ for Medicare.
Keep payer medical policies for high-volume services in your coding workflow and check diagnosis, frequency, and place-of-service limits.
Run claims through a Claims Validator to catch code and diagnosis pairings that commonly trigger non-coverage.
Track CO-96 by remark code, not just by CARC. The remark code shows whether you have a coding, documentation, or front-desk problem. For a framework, see medical claim denials and their preventable causes.

Specialty notes

Behavioral health practices often see CO-96 when a plan carves out mental health benefits to a separate administrator, making the medical plan’s non-coverage technically correct. The fix there is to bill the carve-out plan, not to appeal. For DME, a non-covered item may be covered as a different item, so check whether a different HCPCS code better describes what was supplied.

Remark codes that may appear with CO-96

N130 (Consult plan benefit documents/guidelines for information about restrictions for this service.): The restriction is in the plan's benefit documents; read them to see the exact exclusion.
N425 (Statutorily excluded service(s).): The service is statutorily excluded, so an appeal on medical grounds is unlikely to change the outcome.
N429 (Not covered when considered routine.): Not covered because the payer considers the service routine.
N383 (Not covered when deemed cosmetic.): Not covered because the payer considers the service cosmetic.
N115 (This decision was based on a Local Coverage Determination (LCD).): The decision relied on a Medicare Local Coverage Determination; review its coverage criteria.

PR-204 (This service/equipment/drug is not covered under the patient's current benefit plan): The service is not covered under the patient's current benefit plan, usually reported as patient responsibility.
CO-50 (These are non-covered services because this is not deemed a 'medical necessity' by the payer.): Non-covered because the payer decided it was not medically necessary, which is appealable with documentation.
CO-49 (This is a non-covered service because it is a routine/preventive exam or a diagnostic/screening procedure done in conjunction with a…): Non-covered because the service is routine or preventive in nature.
CO-167 (This (these) diagnosis(es) is (are) not covered.): Non-covered because of the diagnosis reported.
CO-55 (Procedure/treatment/drug is deemed experimental/investigational by the payer.): Non-covered because the service is considered experimental or investigational.

CO-96 FAQ

What is the difference between CO-96 and PR-96?

The group code sets liability. CO-96 means the provider absorbs the charge; PR-96 means the payer says the patient is responsible. The service is non-covered either way.

Can I bill the patient for CO-96?

Generally not, unless the patient signed a valid advance notice or financial waiver before the service and your payer contract allows it. For Medicare, that means a properly completed ABN for services expected to be denied.

Should I appeal CO-96?

Appeal when the remark code shows the denial rests on something you can correct or disprove, such as a diagnosis, frequency, or policy criterion you met. If the service is a plan or statutory exclusion, an appeal rarely changes the result.

Why is there always a remark code with CARC 96?

X12 requires at least one remark code (or NCPDP reject code) with CARC 96 because 'non-covered' alone doesn't tell you why. The remark code is the real reason.

Is CO-96 the same as a medical necessity denial?

No. Medical necessity denials normally use CARC 50. CARC 96 is broader and often reflects a benefit exclusion or payer policy.

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