Suppose a payer issues a CO 50 denial code or rejection on a claim. In that case, it indicates that they have decided not to pay for the service or procedure because they do not believe it was medically needed to be carried out. It is the sixth most frequent reason Medicare claims are denied.
CMS reports that approximately 30% of claims are lost, disregarded, or denied. In a world where payment is already complex, claim denials significantly impact the revenue cycle and are a major concern for hospitals.
You must be aware that each payer’s policy on medical necessity is unique and constantly changing. Additionally, “medical necessity” might vary greatly depending on who pays. While Medicare and the American Medical Association (AMA) serve as the basis for the criteria, it is crucial to remember that each state has its definition of what is medically required. Therefore, it is essential to comprehend medical necessity.
This post explores CO 50 denial code. The post highlights CO 50 denial reasons and intends to present solutions for denial code CO 50.
CO 50 Denial Code
The procedures are not considered medically necessary by the insurer; hence they are not covered. If the procedure code does not match the diagnosis code billed under the LCD/NCD guidelines, the insurance company will deny the claim with the CO 50 denial code. It indicates that the services are not covered because the payer does not believe they are medically necessary.
The lack of medical necessity means that the diagnosis code may not satisfy the NCD or LCD requirements for demonstrating medical necessity.
Local Coverage Determination (LCD) is defined by Section 1862(a)(1)(A) of the Social Security Act as a decision made by a fiscal intermediary (FI) or carrier regarding whether or not to cover a certain service for the entire FI or carrier. This decision is justified under Section 522 of the Benefits Improvement and Protection Act (BIPA).
Denial code CO 50 is issued because the correct diagnosis code for the procedure was not used. If the coding staff is knowledgeable and proficient with payer policies, contracts, local coverage determination (LCD) codes, and national coverage determination (NCD) codes, claims are less likely to be denied. Detailed documentation and effective communication from the clinical team will also be beneficial.
CO 50 Denial Reason
Healthcare services are medically essential if a clinician uses good clinical judgment to prevent, evaluate, diagnose, or treat an illness, injury, disease, or its symptoms. Medicaid and private insurance payers each have their requirements regarding medically essential materials, treatments, and services. These rules might be found in the payer’s payment policy or clinical guidelines. A claim submitted to the payer under CO 50 may be denied for various reasons.
Some of the CO 50 denial reasons are:
- The item’s LCD may show it requires a certain diagnosis code or modifier code
- Absence of a development letter seeking additional evidence to support the billed service within the allotted time frame
- The item being billed for is medically unessential
- The payer’s allocated time for hospital service has been exceeded
A “medical necessity” denial may mean that a practice must engage in many activities. The practice’s insurance agreement will outline its obligations.
Solutions for Denial Code CO 50
According to the explanation in the CO 50 rejection code, the services at issue are not covered by the payer’s policies because the payer has not determined that they are medically required for the patient. So, it is critical to determine if the given diagnosis code meets LCD/NCD standards for billing and payment.
According to the LCD/NCD standards, if the diagnosis code on the bill cannot be paid, we must resubmit the claim using the correct diagnosis code. You have the legal right to contest the claim if the issued diagnostic code was based on LCD and supported the provided proof.
It is possible to appeal a claim that has been rejected with CO 50 denial code. Here is what must be done to rectify CO 50 denial code:
- Determine the precise reason for the denial: If you receive a CO 50 denial code, you should investigate further, contact the payer, and determine exactly why you have not been paid.
- Be prepared with your Claim Number: Remember that you cannot simply use the original claim number; you must include additional information to indicate that this is a corrected claim. It will prevent the claim from being returned to you as a duplicate.
- Record the data: It is crucial to note facts such as the date, the call’s reference number, and the individual you speak with when working with payers. Thus, you can utilize your skills if you need to make many phone calls to contest the claim.
- Follow-up: Even if you resubmit a rejected claim due to a CO 50, you should follow up at least once every month. You should never allow the claim to get lost in the shuffle.
- Send out letters requesting assistance: Include the claim number, the patient’s name, the date of service, the provider’s number, and your member ID when appealing a claim. Keep it brief and concise, and add any supporting evidence for your allegations. If you ensure everything is correct the first time, your appeal will not be denied.
It is essential to take the following measures to prevent CO 50 denial code:
- Examine the patient’s medical history to determine if there are any indications of a treatable condition.
- Check the corresponding LCD for modifier conditions.
- Respond to development-related letters by the date specified in each letter.
- Verify that all questions on the Certificate of Medical Necessity meet the policy requirements.
- Suppose a supplier is aware that a beneficiary will not be able to receive the equipment. In that case, they can get an ABN (Advance Beneficiary Notice of Noncoverage) before delivering the equipment.
CO 50 denial code is assigned when a procedure code is invoiced with an incompatible diagnosis and the ICD-10 code(s) provided are not covered by an LCD or NCD. Since the payer does not consider this a “medical necessity,” these services are not covered. The word “medical necessity” ensures that services rendered for diagnosing or treating sickness or damage are reasonable and necessary.
CO 50 is a common denial code. You are now aware of the CO 50 denial code and what to do if it arises. However, if you need any assistance with denial management, Precision Hub is here for you.
Precision Hub helps your practice increase profitability by improving operational efficiency. We are a group of certified billing and coding specialists who can assist you in boosting the productivity and efficacy of your practice. Contact Precision Hub immediately to learn more about how we may help you decrease the number of denied claims and enhance your practice’s revenue.