Was your claim denied with a CO 24 denial code, even though you were already paid? Yes! A denial after receiving the payment is possible. This can happen, especially for patients enrolled in advanced Medicare Advantage plans.
Denials, in general, point to deeper systematic issues in your billing system. When claims get denied, it not only delays payment but also increases administrative costs and can negatively impact your practice’s cash flow. The CO 24 denials are tricky to prevent and resolve.
That’s why we have included this in our ‘Denial Code Guides’ series, so you don’t have to face further payment delays and rejections. Before we dive into fixes, let’s clarify what the denial means. So, let’s start.
CO 24 Denial Code – Description
The insurance payer rejects a claim with a denial code CO 24 to indicate that:
“Charges are covered under a capitation agreement or managed care plan.”
But what does this mean? Well, in simple terms, this denial code is issued when Medicare or other payers determine that the services you are billing should not be processed through the traditional fee-for-service payment system. Instead, these services fall under a prepaid arrangement where the provider has already received compensation or is scheduled to receive it soon through capitation payments. So, there is no need to bill the service separately.
The most common reason is when patients have Medicare Advantage plans, also known as Part C Medicare. The Part C plan has all the benefits of Parts A and B. Because of the additional benefits, traditional Medicare is replaced with managed care arrangements, including Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and other third-party payers.
Let’s sum this up in a single statement.
When you submit a claim to Medicare for a patient with a Medicare Advantage plan, the claim gets denied with denial code 24 because the payment responsibility lies with the managed care organization, not with traditional Medicare.
What Causes the CO 24 Denial Code?
By now, you must know that the primary reason for the CO 24 denial code is filling claims separately when the services are already covered under capitation agreements. But the denial itself hints at some deeper underlying issues. These issues can be easily prevented. So, let’s first discuss the root causes, and then we will inform you about the prevention steps.
Eligibility Verification
The first root cause for CO 24 denials is inadequate patient eligibility verification. Time and again, billers make this mistake. This not only leads to denial code CO 24 but also a plethora of denials and billing issues.
When front office staff fail to verify insurance information at the time of service, they may overlook that the patient has switched from traditional Medicare to a Medicare Advantage plan. Patients don’t always inform their healthcare providers about these changes or do so late. So, inspect and verify the patient’s insurance eligibility and benefits before providing any services.
Outdated Coordination of Benefits (COB)
Another common reason for the denial code CO 24 is an outdated COB. Sometimes patients have multiple insurance coverage, or they have changed their plan recently. These changes often do not appear in billing systems due to delays, or sometimes the patient does not inform the healthcare provider about this change. Therefore, it is your responsibility to double-check these details before providing services.
Lack of Prior Authorization
Finally, lack of prior authorization can also become a cause for the denial code CO 24. However, this only happens for services that specifically require prior authorization. Many Medicare Advantage plans have stricter authorization requirements than traditional Medicare. So, when prior approvals are not sought, providers miss the step of confirming whether or not the service is separately reimbursable.
How to Prevent the CO 24 Denial Code?
Now that you are familiar with the top reasons behind denial code 24, it is time to understand how to avoid them.
Eligibility Verification Process
When front office staff fail to verify insurance information at the time of service, they may overlook that the patient has switched from traditional Medicare to a Medicare Advantage plan. So, always inspect and verify the patient’s eligibility before providing any services.
Staff Training
Investing in proper training and education may initially seem quite expensive, but you will get a greater return through steady cash flow. Conduct regular training sessions to educate everyone in your practice, including billing and non-billing teams. Train your billing staff on the differences between traditional Medicare and Medicare Advantage plans. Also, hold routine audits in your billing department to ensure that every claim is processed with care.
Pre Authorization Process
Establish clear procedures for obtaining prior authorizations when required. Many services that don’t need clearance under traditional Medicare may require pre-approval under Medicare Advantage plans. Create a system to identify these requirements and obtain approvals before providing services.
How to Resolve Denial Code 24?
- Start with Verification: Confirm the patient’s current coverage through the Noridian Medicare Portal or the payer’s website.
- Get the Correct Billing Details: Track down the specific requirements for their Medicare Advantage plan, including where to send claims, how they want electronic submissions, and any special codes they use. Every plan does things differently.
- Resubmit with Precision: Resubmit the claim to the proper payer using the member ID assigned by the plan.
- Check Your Network Status: Verify your network status with the new payer. If you are out of network, determine whether you can still treat the patient.
- Know Your Billing Options: For services you have already provided, see if you can bill the patient directly when their plan will not cover it, or if you are out-of-network. Ensure you are following all rules and contracts.
- Consider an Appeal: If you believe the denial was incorrect (perhaps their coverage information was recorded inaccurately or there was a system glitch), gather your documentation and challenge it. Include eligibility records and any plan correspondence.
Final Word
Do you know that denial rates, including the CO 24 denial code, are increasing every year? Data shows that denial rates have risen to 11.8% in 2024, up from 10.2% just a few years earlier. That’s why healthcare denial management services are also becoming more important than ever. It’s best to outsource your billing operations if you want to prevent any further denials and want a smooth revenue cycle.
