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CO-D3 Denial Code (Deactivated): Equipment Ownership Missing

CO-D3 meant a claim for a part or supply was denied because it did not show whether the patient owns the equipment that needs it. X12 deactivated the code and points payers to CARC 16 with remark codes, such as M124.

X12 deactivated CARCD3 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-D3 (CARC D3)
Status: Deactivated StoppedOctober 16, 2003 (in use since January 1, 1995).
Code set: Claim Adjustment Reason Codes (CARC)
Group codes: CO (Contractual Obligation): The supplier needed to add the ownership information; the patient was not billed for the denial.
Official description: Claim/service denied because information to indicate if the patient owns the equipment that requires the part or supply was missing.
X12 Claim Adjustment Reason Codes, retrieved September 25, 2026
Last verified: September 24, 2026 against the official X12 list.

What CO-D3 meant

CARC D3 was aimed at durable medical equipment suppliers. When a claim was for a part or supply used with a piece of equipment, such as a battery or accessory, the payer needed to know whether the patient owned that equipment. Without that, it could not tell whether the item was separately payable, and the claim was denied.

What replaced it

X12’s instruction is to use code 16 with remark codes. The pairing you will see now is CO-16 with M124, which specifically notes the missing ownership indication. If the problem is the rent-versus-purchase rules themselves, payers use CO-108.

If you still see CO-D3

Only historical DME claims should carry it. For a current version of the problem, pull the equipment history for the patient, including when and how the base item was acquired, and include the ownership indicator or narrative the payer asks for. Many DME payers publish specific instructions for reporting this, so follow the payer’s supplier manual.

CO-16 (Claim/service lacks information or has submission/billing error(s).): Named replacement: missing information, explained by a remark code.
M124 (Missing indication of whether the patient owns the equipment that requires the part or supply.): Remark code for a missing indication of whether the patient owns the equipment.
CO-108 (Rent/purchase guidelines were not met.): Rent or purchase guidelines were not met.

CO-D3 FAQ

Why does equipment ownership matter?

Under many DME payment rules, supplies and replacement parts are payable for equipment the patient owns, while items for rented equipment are often included in the rental payment.

What should the supplier do?

Confirm whether the base equipment is owned or rented, add that indication to the claim as the payer requires, and resubmit.

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