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CO-W2 Denial Code (Deactivated): WC Regulations/Policies

CO-W2 meant a workers' compensation payer reduced or denied payment based on the jurisdiction's regulations or payment policies, used only when no other code applied. X12 deactivated it and its notes direct payers to code P13.

X12 deactivated CARCW2 on July 1, 2014. Payers should no longer use it on new remittances, but it can still appear on older ERAs, corrected claims, and appeals.

Code: CO-W2 (CARC W2)
Status: Deactivated StoppedJuly 1, 2014 (in use since October 17, 2010).
Code set: Claim Adjustment Reason Codes (CARC)
Group codes: CO (Contractual Obligation): The adjustment was based on state rules and was not billed to the injured worker.
Official description: Payment reduced or denied based on workers' compensation jurisdictional regulations or payment policies, use only if no other code is applicable. Note: If adjustment is at the Claim Level, the payer must send and the provider should refer to the 835 Insurance Policy Number Segment (Loop 2100 Other Claim Related Information REF qualifier 'IG') if the jurisdictional regulation applies. If adjustment is at the Line Level, the payer must send and the provider should refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment information REF) if the regulations apply. To be used for Workers' Compensation only.
X12 Claim Adjustment Reason Codes, retrieved September 25, 2026
Last verified: September 24, 2026 against the official X12 list.

What CO-W2 meant

CARC W2 was a workers’ compensation catch-all. It covered reductions or denials grounded in the jurisdiction’s regulations or payment policies when no narrower code described the reason. Because the code was general, the regulation reference the payer was supposed to include on the 835 was the key to understanding it.

What replaced it

X12’s note is “Use code P13.” CO-P13 carries the same meaning within the property and casualty P-series and keeps the same last-resort instruction. More specific workers’ compensation alternatives include CO-P12 for fee schedule adjustments and CO-P15 for treatment guideline adjustments.

If you still see CO-W2

It appears on older workers’ compensation bills. Locate the regulation or policy reference, read the rule, and decide whether it really applies to the service billed. If you disagree, use the state’s provider dispute or reconsideration process within its deadlines.

CO-P13 (Payment reduced or denied based on workers' compensation jurisdictional regulations or payment policies, use only if no other code is applicable.): Named replacement: reduced or denied based on workers' compensation jurisdictional regulations or payment policies.
CO-P12 (Workers' compensation jurisdictional fee schedule adjustment.): Workers' compensation jurisdictional fee schedule adjustment.
CO-P15 (Workers' Compensation Medical Treatment Guideline Adjustment.): Workers' compensation medical treatment guideline adjustment.

CO-W2 FAQ

Why was W2 described as a last resort?

Its text says to use it only if no other code is applicable. Payers were expected to use a more specific code, such as a fee schedule or treatment guideline code, whenever one fit.

How do I find which rule was applied?

The code text required the payer to identify the regulation in 835 reference fields at the claim or line level. If it is absent, ask the adjuster.

Important: read before using this information

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