Denial Code CO-150: Handling Payer Contractual Obligations

What is CO 150 Denial Code?

The payer has denied the claim because the information provided does not justify the level of service billed.

This often occurs when the payer believes that the service provided was either unnecessary or lacked adequate documentation to meet the required medical necessity criteria.

In medical billing, CO-150 is a critical denial code that signifies a mismatch between the billed service and the documentation or justification provided. This denial points to discrepancies in the details submitted, such as improper coding or insufficient medical records, which can lead to delays in reimbursement. Understanding CO-150 helps healthcare providers identify the root cause and take appropriate action to resolve the issue.

Example of a Claim Denied with CO-150

Initial Billing

CPT 97110: Therapeutic Exercise

Outcome:

The claim was denied under CO-150 because the documentation did not support the level of service provided. The payer determined that the exercise sessions were not medically necessary based on the clinical notes submitted.

Common Reasons for CO-150 Denials 

Let’s have a look at the most common causes of CO-150 denials.

• Insufficient Documentation: The medical records or notes provided may not adequately justify the level of service billed, such as not showing the severity of the condition or the need for the specific treatment.

• Incorrect Coding: The CPT/ICD codes submitted may not accurately reflect the service provided or the patient’s condition, causing a mismatch with the payer’s requirements or guidelines.

• Failure to Meet Medical Necessity: The payer may reject the claim if the service does not meet their specific medical necessity criteria. This could happen if the documentation does not demonstrate that the service was appropriate or required based on the payer’s standards.

• Level of Service Discrepancies: Billing for a higher level of service without adequate documentation to support it can lead to CO-150 denials, as payers require the treatment level to be justified based on the clinical circumstances.

These reasons can often be mitigated by ensuring correct and complete documentation, accurate coding, and thorough justification of the services provided.

How to Resolve Denial Code CO-150

Here’s a step-by-step guide to address CO-150 denial effectively:

Step 1: Review the Denial Notice

Carefully read the denial notice to understand the payer’s reason for denial under CO-150. Confirm if it's due to a mismatch in service level or medical necessity.

Step 2: Check Documentation for Medical Necessity

Ensure that your documentation clearly establishes medical necessity. Reassess if the treatment aligns with the payer’s criteria based on the patient’s condition and clinical guidelines.

Step 3: Verify Service Level Accuracy

Confirm that the level of service billed is supported by the documentation. Adjust the claim if a lower level of service should have been billed.

Step 4: Correct Coding Errors

Review CPT and ICD codes to ensure they accurately represent the service and diagnosis. Update any discrepancies that may have caused the denial.

Step 5: Resubmit or Appeal the Claim

Once corrections are made, resubmit the claim with the updated information. If you believe the denial was in error, proceed with submitting an appeal and include any additional supporting documentation.

By following these steps, you can efficiently resolve CO-150 denials, ensuring that future claims are processed and reimbursed correctly.

How SPRY Helps Prevent CO-150 Denials

SPRY’s automation ensures that all aspects of the claim process are accurate, compliant, and efficient, reducing CO-150 rejections and ensuring timely reimbursements.

Accurate Documentation: SPRY’s automated tools ensure your clinical notes and billing align with payer requirements. With features like SPRY Scribe for compliant SOAP notes in two minutes, SPRY minimizes discrepancies between services and billed codes, ensuring alignment with medical necessity criteria.

Correct Coding: SPRY auto-selects the correct CPT and ICD codes based on patient data, ensuring your billing matches the service rendered. This prevents miscoding, a common cause of CO-150 denials.

Error Flagging & Denial Management: With automated error detection and denial management, SPRY helps identify potential issues before they lead to denials. Alerts notify you of coding or documentation errors, enabling corrections to be made before resubmission.

Streamlined Claims Submission: SPRY’s automated scrubbing and payer alerts ensure seamless claims submission. This system flags errors in real-time and ensures that claims meet payer compliance standards, improving the likelihood of approvals.

Schedule a demo to learn how SPRY can optimize your claims process and reduce denials!

FAQs

What does Denial Code CO-150 mean?

Denial Code CO-150 indicates that the payer believes the information provided does not justify the billed level of service, meaning the service was deemed either unnecessary or lacking required medical necessity.

How can I avoid CO-150 denials?

Ensure accurate coding, proper documentation, and that services meet the payer’s medical necessity criteria. Use automated tools to minimize errors and ensure compliance.

How does SPRY help prevent CO-150 denials?

SPRY streamlines coding, documentation, and eligibility checks, ensuring your claims are accurate and aligned with payer expectations, minimizing the chances of CO-150 denials.

What should I do if my claim is denied with CO-150?

Review your documentation, correct any errors, and resubmit the claim. If necessary, file an appeal with the appropriate supporting information.