Prevent CO-197 Denials: Essential Strategies for PT Clinics

What is Denial Code CO-197?

Denial Code CO-197 indicates that a claim has been denied due to missing precertification, prior authorization, or notification required before the service was rendered. This denial highlights the importance of obtaining the necessary approvals from insurance companies or other relevant entities before providing medical services. Failing to secure these authorizations can lead to delayed payments, increased administrative burdens, and potential revenue loss for healthcare providers.

Example of a Claim Denied with CO-197

Initial Billing:

• CPT 97110: Therapeutic Exercise - $120

Outcome: The claim for the therapeutic exercise session was denied with Denial Code CO-197 because the clinic failed to obtain prior authorization from the payor before providing the service. To resolve this, the clinic can appeal the denial by submitting proof of the necessity of the therapy and ensuring that future sessions have the necessary authorizations in place.

Common Reasons for CO-197 Denials 

Let’s have a look at the most common causes of CO-197 denials.

• Lack of Pre-Certification or Authorization: One of the most common reasons for this denial is failing to obtain pre-certification or authorization from the payor before providing treatment. This oversight can occur due to misunderstandings about the payor’s requirements.

• Failure to Notify the Payor: If the provider does not notify the payor about a planned procedure in advance, it can lead to a denial. Payors often require notification to assess the medical necessity and coverage.

• Insufficient Documentation: Claims may be denied if the necessary documentation, such as medical records or test results, is incomplete or not submitted before the treatment. This information is crucial for determining the medical necessity of the service.

• Timeliness of Pre-Certification: If pre-certification or authorization is not obtained within the required timeframe set by the payor, it can result in a denial. Insurance companies typically have strict deadlines for this process.

Understanding these reasons can help clinics refine their billing practices and reduce the occurrence of CO-197 denials.

How to Resolve Denial Code CO-197

Here’s a step-by-step guide to address CO-197 denial effectively:

Step 1: Review the Denial Notice
Carefully examine the denial notice to understand the specific reason for the denial. Check for any missing information related to precertification, prior authorization, or notification that may have led to the denial.

Step 2: Confirm Precertification or Authorization Requirements
Verify whether precertification or authorization was required for the service provided. Review your practice's records to ensure that the necessary approvals were obtained and are properly documented.

Step 3: Correct Any Issues
If you find that authorization was missing or not completed in time, take immediate steps to rectify the situation. This may involve obtaining the required authorization retroactively, ensuring you have the correct documentation, and confirming any future authorization needs with the payer.

Step 4: Appeal if Needed
Prepare your appeal with all supporting documentation, including evidence of medical necessity, to demonstrate compliance with the payer’s requirements. Make sure to submit it within the timeframe specified by the insurance company.

By following these steps, PT clinics can effectively resolve CO-197 denials and improve their billing processes.

How SPRY Helps Prevent CO-197 Denials

SPRY provides comprehensive solutions to ensure billing practices align with payer requirements. By streamlining authorization processes, enhancing documentation accuracy, and improving communication, SPRY helps clinics reduce denial risks and optimize their revenue cycle.

Integrated EMR and Billing: SPRY combines Electronic Medical Records (EMR) and billing functions into a single platform. This integration minimizes manual data entry errors, which are common causes of claim denials due to incorrect coding or incomplete information​.

Automated Coding: By utilizing automated billing templates, SPRY populates CPT and ICD codes directly from treatment notes. This reduces the risk of coding errors and ensures that all necessary information is submitted accurately​.

Comprehensive Documentation: SPRY emphasizes complete and accurate documentation by guiding users to ensure that all required treatment details are recorded. This helps avoid denials due to incomplete documentation, a significant factor for CO-197 denials​.

Authorization Management: SPRY proactively flags any missing authorization details before a claim is submitted. Automated alerts notify staff to complete required authorizations, reducing delays and helping to prevent claim rejections due to incomplete authorization.

Discover how SPRY can streamline your authorization process and reduce the risk of CO-197 denials. Schedule a demo today!

FAQs

1. What does Denial Code CO-197 mean?
Denial Code CO-197 indicates that a claim has been denied due to missing precertification, prior authorization, or notification required before the service was rendered. This denial signifies that necessary approvals were not obtained from the insurance provider prior to treatment.

2. What are the common reasons for CO-197 denials?
Common reasons include lack of pre-certification or authorization, failure to notify the insurance company about planned treatments, and delays in obtaining necessary approvals. Any of these oversights can lead to a denial under code CO-197, affecting the clinic's revenue cycle.

3. How can I prevent CO-197 denials?
To prevent CO-197 denials, ensure that all required pre-certifications and authorizations are obtained before services are provided. Maintain open communication with payers regarding treatment plans, and regularly train staff on billing practices to stay informed of any changes in payer requirements.

4. What steps should I take if I receive a CO-197 denial?
First, review the denial notice to understand the specific reasons for denial. Then, gather any necessary documentation, including proof of pre-certification or authorization. If you believe the denial was made in error, you can appeal the decision by submitting supporting evidence within the specified timeframe.