CO197 denial code description and corrective action

• For certain medical treatments, the provider needs to obtain approval from the insurance company, which is referred as authorization, notification, pre-treatment, or precertification.

• This denial may occur if the services provided require authorization but were not obtained from the insurance.

• It may also occur if the auth# entered on the claim is invalid, either for the date of service (DOS) or for the services billed.

• Sometimes this denial also occurs if the provider is out-of-network and the patient does not have out-of-network benefits, in which case every service requires authorization. In such situations, we proceed according to the denial stating that services are not covered by out-of-network providers (CO242).

• There are two types of authorization: prior authorization (obtained before the services are performed) and retro authorization (obtained after the services are performed).

Actions

• First, we need to verify the status of the claim. This can be done by checking the status through the insurance web portal or by calling the payer.

• The most important step is to determine whether the claim denial is valid or if the insurance has denied the claim by mistake.

• Call the insurance company and ask representative to check if authorzaiton is present in their system and if authorization is present and also effective for the billed DOS and services the ask the representative to reprocess the claim. Be sure to note the claim number, rep name and call reference number, and then follow up on the claim after the provided TAT.

  If auth is available but rep deny to reprocess claim then we proceed to submitting corrected claim with this authorization.

• If auth is not available in system and services performed is an emergency service then request the representative to reprocess the claim, note the necessary details, and follow up on the claim after the given TAT.

• If auth is not available and service is also not emergency then ask rep if retro authorization is possible to obtain, then follow the procedure rep told to get retro authorization. And if retro auth is also not possible to obtain then claim should be written off but some clients want us to submit an appeal, so proceed accordingly.

• For submitting an appeal/corrected claim, must calculate the timely filing limit starting from the processed date. If the limit has been exceeded, the claim will be denied again for exceeding the filing deadline. In such cases, we should consult with the provider. Some clients may still want us to submit the appeal/corrected claim even after the timely filing limit has passed, so we should proceed according to their instructions.

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