Do you know that every year, almost 20% of all medical claims are denied? That is billions of dollars lost for practices, hospitals, and patients annually. Billing and coding errors are the primary reason for these denials. According to a study, coding errors alone account for 42% of all claim denials.
The CO 4 denial code is a common reason for denials. In this blog, we will discuss the CO 4 denial code in detail and also provide some prevention steps that you can take to reduce your chance of getting the CO 4 denial. So, let us start.
CO 4 Denial Code – Description
The denial code CO 4 means a claim was denied because the procedure code and its modifier do not match or a required modifier is missing.
To better understand this denial, it is essential to understand what procedure codes and modifiers are.
In medical billing, procedure codes describe the services or procedures the physician performed. Modifiers give extra details, like whether the procedure was done on both sides of the body or under certain circumstances. These are two-character codes (letters or numbers) added to the procedure and HCPCS codes, giving the insurance provider information about things like:
- Where the procedure was performed
- Why the procedure was needed
- If the procedure was repeated or done differently than usual
If the modifier and the procedure code do not match, the insurance company will reject the claim with denial code CO 4.
What Causes the CO 4 Denial Code?
CO 4 denials can have several root causes. So, it is vital to identify these causes before we move on to prevention and resolution steps.
The following are the most common reasons for denial code CO 4:
Inconsistent Procedure Code and Modifier
As mentioned earlier, the primary cause of CO 4 denials is inconsistency between the procedure code and modifier. Either there is an inconsistency or the modifier is missing from the claim.
This happens because of a coding error or when the billers are not trained and up-to-date with the latest regulations.
Insufficient Documentation
Another reason you might get flagged with a denial 4 is a lack of necessary documents.
Even if you have used the appropriate modifiers but do not have any official documentation to back them up, the insurer may refuse to reimburse the claim amount.
That is because, without proper documentation, the insurer may think you are trying to upcode the services to get more money.
Competitive Bidding Program Requirements
Now, some insurance payers can have their own rules, which are outlined in their contracts.
One of these rules can be fulfilling requirements for the Competitive Bidding Program.
Items billed under the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program often require specific modifiers.
So, if you neglect to use the correct competitive bid modifier, your claim might get denied with denial code 4.
Beneficiary’s Residence in a Competitive Bid Area (CBA)
Another similar reason can be compliance with CBA rules.
If a patient’s permanent address is within a CBA, services must be provided by a contracted supplier. Overlooking this requirement can lead to a CO 4 denial.
How to Prevent Denial Code CO 4?
The following tips can help you prevent the CO 4 denial code.
Stay Updated
The first thing you can do as a healthcare provider is to stay updated with the latest developments in billing/coding regulations.
Refer to resources related to the DMEPOS Competitive Bidding Program regularly to ensure the correct modifiers are used for specific items or services.
Thorough Training for Staff
Invest in your billing staff. Conduct routine training sessions and make sure everyone is well-versed in procedure codes and modifiers.
Doing so will significantly reduce your risk of denials.
Double-Check Before Submission
Implement a two-step verification process in your organization. Before submitting a claim, have a secondary review to check for consistency between procedure/HCPCS codes and modifiers.
Rechecking all the codes and patient information will reduce denials and save money and resources.
Leverage Billing Software
The most significant factor behind missing or inconsistent modifiers is human error. No matter how good your team is, if they are trying to work manually, they are bound to make errors.
So, implement computer-based billing platforms in your practice and hospital. Advanced software can auto-detect missing or inconsistent modifiers.
How To Resolve Denial Code CO 4?
The denial code CO 4 is one of the soft denials. Hence, you can resolve it easily. Here are some steps that you can follow:
Review the Claim Details
As a first step, check the claim submission details. Check whether the biller has used the proper procedure code and modifier. Double-check if the modifier is applied to the correct procedural code.
If necessary, you can also check the Electronic Remittance Advice (ERA) or the patient’s Explanation of Benefits (EOB). These documents contain all the details as to why the insurer has refused to reimburse.
Check for Documentation Errors
Review the medical documentation for the claim to verify that the procedure performed correctly corresponds with the modifier used. Look for any discrepancies or inconsistencies that may have triggered the denial.
Communicate with the Coding Team
Once you identify the error, contact the coding team responsible for assigning the procedure codes and modifiers.
Provide them with the correct documents and point out the error. Request them to review the claim and use the correct modifiers and procedure codes.
Resubmit the Claim
Once the necessary updates have been completed, resubmit the claim to the payer for reprocessing. Sometimes, the insurance company will ask you to cancel the previous claim and create a new claim request. So, assess the situation and move accordingly.
Track the Resubmission Status
Once everything is done, all you have to do is track the resubmission. Follow up with the insurer every 15 days to make sure there are no issues and the payer is not considering denials or rejections related to the same code.
Final Word
Although the CO 4 denial code is one of the most common denials, it is also among the most easily prevented and resolved.
You can reduce your chance of getting CO 4 denials by understanding why they occur and being proactive. For providers struggling with frequent claim denials, outsourcing denial management to experts is the best idea. Our team of certified billers at NeuraBill has decades of experience managing and resolving all kinds of denials.
