CO 5 Denial Code

CO 5 Denial Code: The procedure code or type of bill inconsistent with the place-of-service. It means Procedure code is not companionable with the place the health care service provided to patient.

When the procedure code or type of bill is inconsistent with the place of service in the healthcare setting, it signifies a discrepancy between the specific medical procedure being billed and the location where the service was rendered to the patient. This inconsistency can have significant implications in terms of accurate coding and billing, potentially leading to claim denials, payment delays, and compliance issues.

When encountering a CO 5 denial code coupled with the RARC Remittance Advice Remark Code M77, it signifies an issue related to a missing, incomplete, invalid, or inappropriate place-of-service. This denial code points to the necessity of correcting either the place of service designation or adjusting the procedure code in alignment with the specified place of service.

Understanding the CO 5 denial code in medical billing requires comprehension of the following terms::

• Procedure Code
• Type of Bill
• Place of Service

What is Procedure Code in medical billing?

Procedure code is also called as CPT-Current Procedural Terminology codes maintained by AMA-American Medical Association. Procedure code is a 5-digit codes with descriptive terms for reporting medical services and procedures to patients rendered by healthcare physicians.

The purpose of the procedure code is to provide a

• Establish a standardized language that effectively conveys the specific treatment or service provided to a patient.
• Tracking healthcare utilization.
• Developing medical guidelines.
• Conducting research, identifying the correct services for patients and medical care reviews and
• Finally, the payment to provider will be based on the procedure code billed.

What is Type of Bill in medical billing?

Type of Bill is a 4-digit code and used to describe the type of bill physician submitting to the insurance company.

Each code is defined as follows:

• First Digit- Leading 0, ignored by Center for Medicaid and Medicaid services-CMS
• Second Digit- Type-of-Facility
• Second Digit- Type-of-Care
• Third Digit- Frequency

What is Place of service in medical billing?

Place of Service also called as POS and it is indicated on field# 24B on the HCFA claim form.

Place of service is a 2-digit codes used to indicate the place the healthcare services were provided by physician to patient. Examples: Home, Hospital, Office, Clinic etc).

Action needs to be taken when claim denied with denial code CO 5:

• Review the previous date of services to determine if the same procedure code was previously billed with the same type of bill and the place of service code.
• Check if payment has been received from an insurance company for previously billed claims with the same procedure code, type of bill, and place of service (POS). If yes, then contact the insurance company claims department and send the claim back for reprocessing by highlighting previously paid claims.
• If previous Date of Service (DOS) has not received any payment, it is essential to send the claim to the coding team for a thorough review and correction. The coding team must meticulously assess the claim to ensure that all elements, including the CPT code, Bill type, and Place of Service (POS), are valid and accurately reflect the services provided.
• If the coding team determines that the billed claim is accurate, it is crucial to contact the insurance company to request a reprocessing of the claim. In the event that the insurance representative refuses to send the claim back for reprocessing, the next step is to initiate an appeal process along with providing detailed medical records to support the claim. By appealing the claim and submitting comprehensive medical records, you can present a strong case to the insurance company, highlighting the necessity and validity of the claim.
• Suppose if coding team rectify the error and suggest the correct codes, update the claim with the accurate information and resubmit it to the insurance company for reimbursement as corrected claim.

Note: We can also reach out to the insurance company’s claims department to verify the correct place of service for a particular procedure code or type of bill reported and act accordingly.