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In a previous podcast and article, we discussed the link between the Supreme Court, medical denials, and pornography. If it sounds a bit bizarre or even explicit, it’s not. It’s somewhat innocent, but I think it’s a good illustrator of how our system is so messed up.

The link that we said there was, according to the Supreme Court of the United States, at one point when they were trying to define what pornography was, the US Supreme Court Justice said, “I’ll know it when I see it.” But that’s a very, very poor way to run things.

The specifics

Now, we’re going to dive into some actual specifics to illustrate some of the problems and maybe try to tease out what we can do on these. If you go through and look at the list of codes, there are adjustment codes, and there are remark codes, sometimes referred to as CARCs and RARCs. We dive into some of those specifically.

Let’s take the most prominent and accessible example of a denial code that we should not consider denial. That’s a CO45. REMEMBER THAT the CO stands for the adjustment group, and the 45 is the adjustment code. Again, depending on the code, you may have multiple adjustment groups like PR, PI, or CO. In this case, a CO45 is a contractual adjustment. It’s probably the most common type of remittance advice code you can receive. It’s not a denial. You probably got paid. 

Indeed, this code doesn’t indicate that you did not get paid. It just means that you got paid some lesser amount instead of getting paid your full fee schedule. And there was an adjustment because you have a contract with that payer.

Contractual adjustment

Let’s take a step back and think about this at a higher level. So that’s a contractual adjustment, and a contractual adjustment is not a denial. So does that mean all contractual adjustments should be considered not to be a denial? Probably not. Let’s come back to that.

Let’s take the remark code MA15. MA15 means the claim essentially got separated. Well, again, that’s not a denial code. At least, in our opinion, that’s not a denial. It does not mean that you didn’t get paid, or you’re not going to get paid, or there is even some work to be done to resolve or overturn that denial. It is just a notification, “Here’s what’s going on. Here’s what’s happening.”


How about N442? Well, this means you got paid on an alternate fee schedule, but you got paid. So this is almost like really a contractual adjustment. Isn’t it saying, “Hey, you got paid? We paid you. And there’s a contracted rate for this, but it’s something a little bit different”? Is that a denial? It would seem to us that that is not denial because, essentially, again, you’re getting paid. And it’s not just that you’re getting paid, but presumably, you’re getting paid the correct rate, not some incorrect discounted rate or partial payment or something like that.


Let’s take another example, a CO109. Now, 109 means that essentially, it got submitted to the wrong payer in the opinion of the insurance company. Frequently, again, it splits into two broad categories. In a CO109, you have a situation where the payer says, “You sent it to the wrong payer. Send it to the right payer.” And then, it’s incumbent upon the provider or the billing company to figure out the proper payer and send it on to that correct payer.

There is a subcategory of the CO109 where they say, “Hey, you sent it to the wrong payer, but we forwarded on for you to the correct payer. Essentially, nothing for you to do.” Is that a denial, or is that just a notification of something that’s happening: that it’s been processed for you and sent out to the correct payer? There’s not an easy answer to that. There’s a complicated nuance to that, and we’ll talk about it in another one in terms of whether or not that was correct. But if that information is accurate, coming from the insurance company, that it did get forwarded to the correct payer, is it a denial?

The rate

A CO225 or a CO253? A CO253, if I remember correctly, is a sequestration. It means that the government is paying you less than the standard contracted rate because of some legislation that’s going on, some budget issue, whatever the case might be where they’re paying a lesser rate. A CO253 is not a denial. It’s like a contractual adjustment just letting you know that you’re getting paid at a lesser rate, but that’s correct.

Are all of these denials? Are some of them denials? How do we figure it out? How do we dive in and decide which they are?

Adjustment code

Let’s go one step deeper. Let’s take a CO or an 18, I should say. Usually, it’s CO18, but 18 is the adjustment code. And 18 means that it’s a duplicate. Most people, most consultants, most billing organizations, and most billing departments would say, “A duplicate claim notification is not a denial.” 

At a high level, I think that’s correct. If you submit a claim and get it paid, and you submit a duplicate claim, and you get a denial for that, that’s not a denial. You got paid. You’re not trying to overcome something that’s not preventable. Everything worked correctly. You got paid.

Remark codes

Now, let’s look at a couple of remark codes subcategories of that 18. N111 – No appeal right except duplicate service included in the claim that has been previously billed and adjudicated. Okay, so the second part of that says, “You already got paid.” Well, it seems to be that if you got paid for this claim already, that’s not a denial. That’s a duplicate that should fall into the category of “No, it shouldn’t be counted as a denial.”

Let’s go on to another one. N347 – Your claim for a referred or purchased service cannot be paid because payment has already been made for the same service to another provider. Uh-oh! It’s still an 18, but now somebody else got paid for that. That seems like a denial. That seems like a fundamental error. I’m assuming you or whomever you represent performed the service and should have gotten paid. Now, somebody else took your money. That’s a denial. Somebody has got paid for this. It seems like a mistake somewhere that needs to be resolved and, ideally, in the future prevented.


We have two different examples where subcategories mean “Maybe yes, maybe no.” If there is no additional remark code, that’s just a straight-up duplicate. It should not be a denial, maybe. Or maybe, the N522. It just says, “A duplicate of a claim processed or to be processed.” Again, that appears to be a straight-up duplicate and should not be counted as a denial.

These are some detailed examples. The goal is really to dive in and say, “At a granular level, is this one a denial? Yes/no. Is this one a denial? Yes/no.” So that ultimately you have a definitive list to say, “Here’s how we’re defining denials.” Therefore, we can roll it up and quantify and calculate and track over time and, ideally, analyze, identify problems, develop solutions, and prevent denials from happening in the future to make more money and get paid faster, have fewer labor costs associated with contradictions, and more.

In conclusion

That’s a deep dive. We’ll do more of these in the future. But that’s a deep dive on some of the codes that you may receive to help define “What is a denial?”