Denial Code CO-226: Managing Non-Participating Provider Issues

Denial Code CO-226 often represents a significant hurdle in the revenue cycle management of physical therapy practices. This denial code indicates that the claim has been denied because the provider is considered non-participating or out-of-network for the payer. Understanding how to effectively address CO-226 denials is essential for ensuring that your practice receives the appropriate reimbursement and maintains a smooth financial operation. In this blog, we’ll explore the nature of CO-226 denials, provide actionable strategies for resolving them, and share tips on preventing such denials in the future.

What is Denial Code CO-226?

Denial Code CO-226 signifies that the claim was denied because the provider is not contracted or is out-of-network with the payer. This means that the payer has determined that the provider’s services are not covered under the patient’s insurance plan due to the provider's non-participating status.

Why Does CO-226 Matter?

CO-226 denials can have a substantial impact on your practice’s revenue cycle. They can lead to delays in payment, increased administrative work, and potential financial losses if not managed properly. Addressing these denials efficiently is crucial for maintaining financial stability and ensuring that your practice is compensated for the services rendered.

Deconstructing a CO-226 Denial: What Went Wrong and How to Fix It?

Example:

• Initial Billing:
  • CPT 97110: Therapeutic Exercise

• Outcome: The claim was denied under CO-226 because the provider is not in-network with the patient’s insurance plan.

Remedy:

1. Verify Provider Status: Confirm the provider’s participation status with the payer to determine if the provider is indeed out-of-network.
2. Inform the Patient: Notify the patient about the out-of-network status and discuss potential options for proceeding, including possible out-of-pocket expenses or alternative providers.
3. Submit a Claim to the Patient: If the patient is willing, submit a claim directly to the patient for payment or provide a superbill for the patient to submit to their insurance.
4. Review and Adjust Contracts: Consider negotiating or re-evaluating your participation agreements with payers to expand in-network coverage.

• Corrected Billing:
  • CPT 97110: Therapeutic Exercise (with a clear understanding of patient responsibilities and possible patient payment arrangements)

Actionable Steps: How to Address a CO-226 Denial

1. Analyze the Denial: Review the Explanation of Benefits (EOB) or Remittance Advice (RA) to understand why the claim was denied as non-participating.
2. Verify Network Status: Check with the payer to confirm the provider’s network status and understand the implications for billing and reimbursement.
3. Communicate with the Patient: Inform the patient about the out-of-network status and discuss payment options or alternative providers.
4. Adjust Billing Practices: If applicable, adjust billing practices to account for out-of-network services and educate staff on handling such situations.

Common Causes of CO-226 Denials

1. Out-of-Network Status: Providing services when the provider is not contracted with the payer or is not participating in the patient’s network.
2. Incorrect Insurance Information: Errors in patient insurance information leading to incorrect assumptions about network status.
3. Contractual Changes: Recent changes in payer contracts or network affiliations that may not have been updated in billing systems.

Proactive Prevention: Avoiding CO-226 Denials

Pre-Claim Submission Checklist:

• Verify Network Status: Ensure that your practice is credentialed with the patient’s insurance plan before rendering services.
• Confirm Patient Coverage: Check patient insurance coverage details to confirm network status and potential out-of-network costs.
• Educate Patients: Inform patients about their network options and out-of-pocket costs associated with out-of-network services.

Training and Best Practices:

• Regularly train billing and administrative staff on verifying provider network status and handling out-of-network scenarios.
• Develop protocols for communicating with patients about their insurance coverage and potential financial responsibilities.

Technology and Tools:

• Utilize billing software that integrates with payer networks to automatically verify provider status and patient coverage.
• Implement patient eligibility verification tools to confirm network status and reduce errors in claims submissions.

Conclusion: Efficient Management of CO-226 Denials to Maintain Revenue Integrity

Denial Code CO-226 can present challenges in your billing process, but with effective strategies and proactive measures, your practice can manage these denials successfully. By verifying provider network status, communicating with patients, and adjusting your billing practices, you can minimize CO-226 denials and ensure that your practice remains financially secure.

Streamline Your Billing with SPRY

Handling CO-226 and other billing complexities can be simplified with the right tools. SPRY’s advanced software solutions help you verify provider network status, manage patient communications, and streamline your billing processes. Ready to optimize your revenue cycle management? Schedule a demo with SPRY today and discover how our platform can support your practice’s financial health.

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