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CO-98 Denial Code (Deactivated): Hospital Must File Claim

CO-98 meant a non-physician service provided to a hospital inpatient had to be billed to Medicare by the hospital, not by the provider who submitted it. X12 deactivated the code without naming a successor.

X12 deactivated CARC98 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.

Quick facts

Code
CO-98 (CARC 98)
Status
Deactivated StoppedOctober 16, 2003 (in use since January 1, 1995).
Code set
Claim Adjustment Reason Codes (CARC)
Group codes
  • CO (Contractual Obligation): The submitting provider could not collect from Medicare or the patient; payment belonged in the hospital's claim.
Official description
The hospital must file the Medicare claim for this inpatient non-physician service.
X12 Claim Adjustment Reason Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What CO-98 meant

CARC 98 applied to Medicare claims for services, other than physician services, that were furnished while the patient was a hospital inpatient. Medicare generally pays for those services through the hospital’s inpatient claim. When an outside lab, supplier, or other non-physician provider billed Medicare directly, the claim was denied with code 98 to say the hospital had to file it.

What replaced it

X12 did not name a replacement. Today, similar denials are reported with more general codes:

  • CO-109 when the claim is not covered by this payer or contractor.
  • CO-97 when the service is included in another payment.
  • CO-170 when the payer does not pay this type of provider for the service.

Remark codes on the remittance usually clarify that the service is part of the inpatient stay.

If you still see CO-98

It is a historical code. For a similar denial today, confirm the patient’s inpatient admission and discharge dates, then check whether your service date falls within the stay. If it does, bill the hospital under your agreement rather than Medicare. If the patient was not an inpatient on that date, submit proof of the dates to the Medicare contractor and ask for reprocessing.

  • CO-109 (Claim/service not covered by this payer/contractor.): Claim not covered by this payer or contractor; send it to the correct one.
  • CO-97 (The benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated.): The benefit is included in the payment for another service already adjudicated.
  • CO-170 (Payment is denied when performed/billed by this type of provider.): Payment is denied when performed or billed by this type of provider.

CO-98 FAQ

Why couldn't the provider bill the service directly?

Under Medicare, many non-physician services furnished to hospital inpatients are included in the hospital's inpatient payment. The hospital bills for them and pays the outside provider under an arrangement.

What should an outside supplier do after this denial?

Contact the hospital's billing office to be paid under your arrangement with the hospital, rather than billing Medicare or the patient.