Denial Code CO 197

Denial Code CO 197 payment adjusted for the absence of precertification/authorization

Receiving a denial from an insurance company for lack of preauthorization is a common issue faced by healthcare providers. Denial Code CO 197 signifies that claims have been adjusted due to the absence of precertification or authorization for certain services as per the patient’s plan.

Key Concepts:

1. Importance of Preauthorization: Preauthorization is the process through which insurance companies determine the medical necessity of certain treatments or services before they are provided. It helps ensure that the services are appropriate and covered by the patient’s plan.

2. Denial Code CO 197: When claims are submitted without proper preauthorization, insurance companies use Denial Code CO 197 to indicate that the payment has been adjusted due to this oversight. This code alerts providers that the claim has been denied for failing to follow the preauthorization requirements.

3. Impact on Providers: Providers must understand the implications of Denial Code CO 197 as it can result in financial losses and delays in receiving payment for services rendered. It highlights the importance of verifying preauthorization requirements before delivering care to avoid claim denials. As per insurance company certain services require an authorization from them before treating patient as per the patient insurance plan, so it’s billing expert responsibility to obtain authorization for those services before provider renders the treatment to patient.

Authorization for medical services can typically fall under two types: pre-authorization (prior authorization) and retro-authorization.

Pre-authorization involves obtaining approval from the insurance company before providing a specific treatment or service. On the other hand, retro-authorization refers to obtaining approval after the treatment has already been administered.

It is important to note that pre-authorization is the preferred method by most insurance companies. This is because pre-authorization allows insurers to review the necessity and appropriateness of the treatment beforehand, ensuring that the proposed service meets their coverage criteria.

How to handle denial code CO 197

• When encountering CO 197 payment adjustments due to the absence of precertification/authorization, it is crucial to first verify the location of services rendered for the patient by checking block number 24 B. In the case of services provided in an emergency care unit, such claims typically do not require prior authorization. To address this issue, it is essential to contact the insurance company by phone and submit these claims for reprocessing.
• For healthcare services that were not an emergency services, the next step is to to obtain the “prior authorization number” for the services in question. If a valid prior authorization number is located and matches the date of service, the claim should be resubmitted with the prior authorization number.
• In instances where a prior authorization number is not found, it is advisable to inquire with the insurance company about the possibility of obtaining a “retro authorization.” If permissible, obtain the contact information for the retro authorization department to request the retro authorization and ascertain the deadline for submitting the corrected claim.
• If retro authorization is not granted, investigate the potential for appealing the claim. Ensure you have the requisite medical records, appeal fax number, appeal address, and appeal deadline in place for this process.
• If an appealed claim remains unresolved, the final course of action would be to hand over such claims to the client for further action, like writing off the claim.

Adherence to these structured steps ensures proactive management of CO 197 payment adjustments and facilitates effective resolution of precertification/authorization issues in medical billing processes.

Conclusion: In conclusion, Denial Code CO 197 serves as a reminder of the critical role preauthorization plays in the reimbursement process. Healthcare providers must be diligent in obtaining necessary preauthorization’s to avoid claim denials and payment adjustments. By acknowledging the significance of preauthorization requirements and implementing efficient processes, providers can minimize denials, optimize revenue flow, and deliver quality care to their patients.

Medical Billing Denials and actions – Top Denial codes Solutions (medicalbillingcycle.com)