Claim denials are among the biggest hurdles for healthcare providers. They significantly affect a provider’s cash flow and revenue management. Low cash flow, administrative costs, and piling issues make survival difficult for any practice. One of the most frequently faced denials by healthcare providers is the CO 234 denial code.
But what is it? And how can you prevent it from happening?
Well, that is what we will find out in this blog. Our billing experts at NeuraBill have compiled this comprehensive guide on 234 denials, so you can confidently file insurance claims. In this guide, you will learn why the CO 234 denial occurs, how to prevent it, and the steps to resolve it effectively. So, let’s start.
CO 234 Denial Code Description
Insurance payers trigger the CO 234 denial code to say that a certain service or procedure is not eligible for separate reimbursement.
In other words, when you see the denial code CO 234 on your claim, the payer is essentially saying: “We have already paid you for the service being reported with this claim in the payment of the global package associated with another service on the same date of service, with the same claim type”.
If a healthcare provider bills for a follow-up visit or some minor procedure during the pre- or post-operative global period of surgery, the insurance company will reject the claim with a CO 234 denial code. The purpose of these denials is simple. It ensures that insurance companies don’t have to double-pay for interconnected services.
What Causes the CO 234 Denial Code?
Understanding the root causes of the CO 234 denial code is the first step toward its prevention and resolution. The denials don’t happen randomly. They are a result of billing or coding mistakes and procedural missteps. The following are the most common causes of CO 234 denials.
Improper Grouping of Procedures
Denial code CO 234 is primarily caused by confusion. In the complexity of medical coding, billers often mix up claim lines and either bundle services that should be reported separately or unbundle services that should be grouped. There are payer guidelines for which procedures can be billed together and which must be billed separately. CO 234 denial code is used when a provider bills a secondary procedure separately, even though it is bundled into the parent service.
Coding Inaccuracies
Coding mistakes are another leading cause of CO 234 denials. Using outdated Current Procedural Terminology (CPT) codes, mismatched diagnosis and procedure codes, or codes that lack specificity can sometimes result in the CO 234 denial code.
Lack of Medical Necessity
If you have filed a claim before, you should know that proving the medical necessity of a procedure is imperative to avoid denials. Insurance companies deeply study each claim and scrutinize whether the provided service is medically necessary or not. If you try to bill for a procedure that does not tie to the patient’s diagnosis or the primary procedure or seems redundant, the insurance company may deny your claim.
Incomplete or Inaccurate Documentation
Documentation is another closely related cause. Incomplete or unclear documentation is a magnet for denials. Without detailed clinical notes, test results, or justification for a procedure, payers can not verify its necessity or distinguish it from other services, leading to the CO 234 denial code.
Uncovered Services
Billing for services excluded from a patient’s insurance plan, whether experimental treatments, non-covered items, or services beyond policy limits, can trigger CO 234 if the payer deems them part of a covered procedure’s payment.
How to Prevent Denial Code CO 234?
Let’s now discuss some preventive measures that you can take to reduce the chance of getting the CO 234 denial code.
Master Payer Bundling Rules
Every insurance payer has its own guidelines on bundling. They categorize what is payable separately and what is included in a primary service. To avoid violating these rules, you should regularly review these policies and train your billing team to align the claims accordingly.
As a starting point, you can check out Medicare’s National Correct Coding Initiative (NCCI) edits, which have all the bundling rules that can help you avoid the CO 234 denial code.
Prioritize Thorough Documentation
Documentation is key to successful claims reimbursements. Comprehensive documentation acts as a defense against denials. Before filing your claims, you should append detailed clinical notes, diagnostic reports, treatment rationales, and patient details.
The documentation not only proves medical necessity but also clarifies when and why a procedure is separate from a bundled service.
Conduct Regular Audits
Conducting internal audits is essential to prevent claim denials. Routinely analyze your claims data to spot patterns, like recurring CO 234 denials, and address their root causes.
How to Resolve Denial Code CO 234?
If your claim is rejected with a CO 234 denial code, don’t panic. Follow these steps to address the denial and recover rightful reimbursement:
Look at the Remark Codes
Payers often include remark codes (e.g., NCPDP Reject Reason Codes or Remittance Advice Remark Codes) alongside CO 234. These provide extra context, like specific bundling rules violated, guiding your next move.
Review the Claim Thoroughly
Next, examine the denied claim line by line. Remember, you are looking for minute mistakes that could be the cause. So, check if the procedure was mistakenly billed separately when it should have been bundled or vice versa. To confirm any discrepancies, cross-reference it with the primary service to understand the payer’s perspective.
Validate Coding Accuracy
Double-check all codes for errors or oversights. Ensure that the CPT and ICD-10 codes in the claim match the provided service and diagnosis. Make sure they are specific enough to justify separate payments.
Confirm Compliance with Payer Guidelines
Revisit the payer’s billing policies to ensure the claim aligns with their bundling and reimbursement rules. If it does, you have a case to challenge the denial.
Resubmit the Claim
After correcting all the errors, refile the claim for reimbursement. Ensure all the necessary documents are also submitted with the claim.
Follow Up Diligently
After resubmitting the claim, consistently follow up on the claim’s progress with the insurance company. On average, you should contact the payer every 15 days for better reimbursement chances.
Final Word
The CO 234 denial code may seem like a complex challenge to overcome. But it can be easily tackled with attention to detail. Resolving CO 234 denials is essential for healthcare providers to improve their revenue collection and cash flow. By following the preventive measures and resolution steps shared in this blog, you can significantly reduce your claim denials.
If you are feeling overwhelmed with the complexity of medical billing and increasing claim denials, then contact our expert billing consultants at NeuraBill. We provide the best denial management services to boost your revenue cycle.
