CO-97 means the payer considers the service part of another service or procedure it has already paid for. In other words, the line was bundled. Sometimes that is correct and the line should be written off. Sometimes the services really were separate, and a modifier with supporting documentation gets it paid.
1. What CO-97 means
- CO (Contractual Obligation): the provider owns the adjustment and cannot bill the patient.
- 97: the benefit for this service is included in the payment or allowance for another service or procedure that has already been adjudicated.
The official usage note points to the 835's healthcare policy reference (loop 2110 REF) when the payer includes it. That reference can name the specific edit or policy that triggered the bundling, which tells you whether to write off, correct, or appeal.
2. Why services get bundled
| Reason | What happens | Example |
|---|---|---|
| NCCI procedure-to-procedure edits | CMS publishes code pairs that should not be billed together on the same day. The column 2 code is denied when billed with its column 1 code. | A minor procedure billed with a larger procedure that already includes it. |
| Global surgery period | Routine pre-op and post-op care is included in the payment for the surgery. | A follow-up visit inside the 10 or 90 day global period. |
| Same-day E/M with a procedure | The evaluation that leads to a minor procedure is considered part of the procedure. | An office visit billed with a minor procedure, without modifier 25. |
| Payer bundling policy | Commercial payers apply their own edits, often based on NCCI but not identical. | Supplies or add-on services the payer treats as included. |
CMS updates the NCCI procedure-to-procedure edit tables every quarter, so a pair that paid last year can deny today.
3. Remark codes you will see with CO-97
| Remark code | What it points to |
|---|---|
| M15 | Separately billed services or tests were bundled as components of the same procedure. |
| M80 | Not covered when performed during the same session or date as a service already processed. |
| M144 | Pre- or post-operative care is included in the payment for the surgery or procedure. |
| N20 | Service not payable with another service rendered on the same date. |
| M86 | Payment was already made for the same or a similar procedure within a set time frame. |
4. When a modifier is the right fix
Each NCCI code pair carries a modifier indicator. An indicator of 0 means no modifier can unbundle the pair. An indicator of 1 means a modifier is allowed when the documentation supports separate services.
| Modifier | Use it when |
|---|---|
| 25 | A significant, separately identifiable E/M service was performed on the same day as a procedure. |
| 59 / XE, XS, XP, XU | A distinct procedural service: a separate encounter (XE), separate structure or organ (XS), separate practitioner (XP), or an unusual non-overlapping service (XU). |
| 24 | An unrelated E/M service was performed by the same physician during a postoperative period. |
| 79 | An unrelated procedure was performed by the same physician during a postoperative period. |
| 57 | The E/M visit resulted in the decision to perform major surgery (day before or day of). |
A modifier is a statement that the services were separate. It must match the record. Adding modifier 59 by default to get claims paid is a known audit target, and the Office of Inspector General has reported on its misuse.
5. How to fix a CO-97 denial
- Identify the paired service. Find the line or prior claim the denied service was bundled into, and any policy reference on the remittance.
- Check the edit. Look up the code pair in the current NCCI table (or the payer's published policy) and note the modifier indicator.
- Read the documentation. Was the second service truly separate: a different session, site, or problem? If not, the bundling is correct. Write it off and move on.
- If a modifier applies and was missing, send a corrected claim with the right modifier.
- If the modifier was already there and the notes support it, appeal with the documentation showing the separate service.
Medicare redetermination requests are due within 120 days of receiving the initial determination. Commercial appeal windows are set by contract. See our denial recovery playbook for appeal letter structure.
6. How to prevent CO-97
- Run NCCI edits in your claim scrubber and keep the tables current every quarter.
- Track global periods so visits inside them are flagged at charge entry, with the option to add 24 or 79 when the visit was unrelated.
- Coach documentation for modifier 25. The note should make the separate E/M service obvious to a reviewer.
- Review CO-97 by provider and code pair. Repeat pairs point to a coding habit, not bad luck.
7. Where automation helps
Bundling denials need judgment, but most of the work is lookup: which edit fired, what the modifier indicator is, and whether the note supports separate services. Automation can do that lookup on every CO-97 line, write off the ones where bundling is clearly correct (with a biller's approval), and send only the defensible ones to a person with the documentation already pulled.
Related: CO-16 denial code, CO-50 denial code, and the full CARC and RARC codes list.
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