The CO-167 denial code fires when the diagnosis on a claim is not covered by the patient’s insurance plan. CO-167 is CARC 167 on the official X12 Claim Adjustment Reason Code list, and its official description reads: “This (these) diagnosis(es) is (are) not covered.” When it hits your remittance, your team has one question to answer before anything else: is this denial correctable or non-correctable? That single classification determines your entire resolution path.
Three Facts Every Billing Team Needs on CO-167
Fact 1: The Official X12 Description. CARC 167’s official X12 text reads: “This (these) diagnosis(es) is (are) not covered. Usage: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.” This code has been active since June 30, 2005. X12 last modified it on July 1, 2017. The full CARC list was reviewed on May 1, 2026, with no pending changes to CARC 167. The co 167 denial code descriptions in your billing software always trace back to this source. Review the X12 official CARC 167 definition for current code status. The full code list includes denial code CO 167 alongside all active and deactivated CARCs.
Fact 2: The CO Group Code Financial Consequence. CO stands for Contractual Obligation. When a claim returns CO-167, the adjustment is a provider write-off. The provider cannot bill the patient for the CO-167 amount. Patient balance billing for a CO adjustment is a compliance violation under the provider’s contract with the payer.
Fact 3: Correctable vs Non-Correctable. CO-167 splits into two resolution paths. When the diagnosis was correctly assigned and the service is excluded from the plan by benefit design, CO-167 is non-correctable. When the denial fired because of an incorrect or unspecified ICD-10-CM code, CO-167 is correctable and the claim can be fixed and resubmitted.
What Is the CO-167 Denial Code? The Official X12 Description and Financial Consequence
CO-167 is the combination of two standardized billing codes: CO (Contractual Obligation, the Claim Adjustment Group Code showing the provider absorbs the write-off) and CARC 167 (the reason code showing the diagnosis isn’t covered). Together, they tell the billing team the denied balance isn’t billable to the patient. The co 167 denial code description combines two code components that your team needs to understand separately before working any denial.
The Two-Component Structure of CO-167
CO-167 is not one code. It’s two codes working together.
Component 1: CO is the Claim Adjustment Group Code. It assigns financial responsibility to the provider.
Component 2: CARC 167 is the reason code. It explains why the adjustment happened: the diagnosis isn’t covered by the plan.
Miss this distinction and your billing team works CO-167 as a generic denial instead of diagnosing which component is driving the resolution path. On the 835 ERA, CO-167 appears in the CAS segment of Loop 2110 as CO followed by 167 followed by the adjustment dollar amount. On paper EOBs, CO-167 appears in the denial code column alongside the dollar amount being adjusted.
The PR group code, which stands for Patient Responsibility, is the alternative group code prefix that would shift the balance to the patient. CO-167 has the CO prefix, not PR. That’s why the co-167 denial code always creates a provider write-off in standard commercial billing. The co-167 denial code description is clear on payer policy: when CO appears, the provider absorbs the adjustment. CO-167 is one of the most actionable denial codes in the billing team’s queue because its resolution path is determined by one question: did the right diagnosis code go on the claim? One O Seven RCM’s guide to the top denial codes in medical billing covers the full operational framework for each high-frequency code your team encounters every month.
CO vs PR Group Code in CO-167: Why the Provider Absorbs the Write-Off and the Patient Cannot Be Billed
When a remittance returns CO-167, the billing team cannot send a patient statement for the denied amount. The CO group code means the write-off is a contractual obligation under the provider’s payer agreement. It’s the provider’s responsibility, not the patient’s. The co 167 denial code always routes to write-off when the CO prefix is confirmed. The PR group code routes the balance in the opposite direction entirely.
The CO Group Code Rule
If the group code prefix is CO, write off the amount and don’t bill the patient. If the group code prefix is PR, the patient owes the balance and you can bill. CO-167 has a CO prefix. The patient cannot be billed for CO-167 unless the payer incorrectly assigned the group code, which requires a payer audit request before any patient statement goes out. The OIG actively audits balance billing for contractual obligation adjustments. Sending a patient statement for a CO-167 denial amount isn’t just an error. It’s a recoverable auditing target. CARC 167 with the CO group prefix is always a provider write-off for this reason.
There’s one documented scenario where CARC 167 appears with the PR group code instead of CO: Medicare ABN billing. When a provider correctly issues an Advance Beneficiary Notice before a service the patient’s Medicare Part B plan is known not to cover, the group code can shift to PR. Section 6 covers this specifically. The X12 Claim Adjustment Group Codes that govern this distinction are publicly available at the X12 Claim Adjustment Group Codes reference. Patient Responsibility only applies when the PR prefix is confirmed on the remittance, not assumed.
What Causes CO-167? The Three Operational Scenarios Your AR Team Needs to Distinguish
The CO-167 denial code fires for three operationally distinct reasons, and the resolution path is different for each one. The most important question after pulling a CO-167 off the remittance is which scenario produced it, not what the generic description says. payer policy creates the denial. ICD-10-CM selection determines whether it’s correctable. The denial code co 167 resolves in under 48 hours when the scenario is identified correctly on day one.
Scenario 1: The Correct ICD-10 Code Was Used but the Diagnosis Is Excluded from the Patient’s Plan
This is the non-correctable CO-167 scenario. The biller coded the visit correctly, the ICD-10-CM code matches the clinical documentation, but the patient’s benefit plan explicitly excludes coverage for that diagnosis category.
Common excluded diagnosis categories include cosmetic procedure diagnoses, certain fertility diagnoses, weight management diagnoses in plans that exclude obesity treatment, and some categories of behavioral health diagnoses in older plans with Mental Health Parity Act compliance gaps. Verify the patient’s benefit grid before writing off. Medical necessity isn’t the issue here. The diagnosis category itself is excluded.
Scenario 1 Resolution Rule: Confirm the exclusion in the patient’s benefit document. Write off the CO-167 amount. Do not send a patient statement unless an ABN was properly executed before the service.
Scenario 2: The Wrong ICD-10 Code Was Assigned and a Covered Diagnosis Applies
This is the correctable CO-167 scenario. The clinical documentation supports a covered diagnosis, but the biller or coder assigned an ICD-10-CM code that falls outside the payer’s covered diagnosis list for that service.
Pull the provider’s clinical notes. If the documentation supports a different, more appropriate ICD-10 code that the payer’s coverage policy includes, correct the claim, assign the right code, and resubmit using frequency code 7 for a corrected claim. This scenario requires a corrected claim submission, not a formal appeal.
Scenario 3: An Unspecified or NOS Diagnosis Code Was Used When a More Specific Code Would Pass
This is the most preventable CO-167 scenario. The payer’s coverage policy requires a specific ICD-10-CM code, but the biller submitted an unspecified, NOS (Not Otherwise Specified), or NEC (Not Elsewhere Classified) code that falls outside the covered list.
Payers increasingly map their LCD and NCD coverage criteria to specified ICD-10 codes. NOS and NEC codes don’t map to covered diagnoses in many policy databases, triggering the co 167 denial code automatically even when the underlying condition would have been covered with the right code. This is the Scenario 3 source, and it’s the most systematic cause in most billing departments. The description alone doesn’t tell you which scenario fired. Only the clinical notes and the payer coverage list together make that determination.
CO-167 vs CO-50, CO-11, CO-96, and CO-177: The Denial Code Disambiguation Table
CO-167 is frequently confused with four adjacent denial codes that fire for related but distinct reasons. Using the wrong resolution path on a misidentified denial costs time and extends the AR cycle. The most dangerous confusion in this cluster is between CO-167 and CO-50. Treating CO-167 as a medical necessity denial routes the wrong documentation to the wrong appeal, and the denial comes back unchanged.
| Code | Official Description | Root Cause | Resolution Path | Key Difference from CO-167 |
|---|---|---|---|---|
| CO-167 | This diagnosis is not covered | The diagnosis category is excluded from the patient’s plan | Verify exclusion, correct ICD-10 if wrong, or write off | About plan-level diagnosis exclusion |
| CO-50 | Not deemed medically necessary | The service doesn’t meet the payer’s medical necessity criteria for any diagnosis | Appeal with clinical documentation and medical necessity justification | CO-50 is a medical necessity failure. CO-167 is a coverage exclusion. The service might be medically necessary and still produce CO-167. |
| CO-11 | The diagnosis is inconsistent with the procedure | The ICD-10 code doesn’t support the CPT code billed | Correct the ICD-10 or CPT pairing and resubmit | CO-11 is a linkage mismatch between diagnosis and procedure. CO-167 is a plan-level exclusion regardless of linkage. |
| CO-96 | Non-covered charges | The service itself is not covered, regardless of diagnosis | Write off without appeal unless ABN was executed | CO-96 denies the service. CO-167 denies the diagnosis. Different starting point for resolution. |
| CO-177 | Patient has not met the required eligibility requirements | The patient doesn’t qualify for the service under their current plan enrollment status | Verify patient eligibility and enrollment status | CO-177 is an eligibility failure. CO-167 is a diagnosis coverage exclusion. Never confuse the two. |
The CO-50 confusion is the most operationally dangerous. A billing team that works CO-167 with a medical necessity appeal wastes the appeal window and receives the same denial back. The starting question for CO-167 is always coverage, not necessity. etactics.com erroneously lists missing prior authorization as a CO-167 cause. That’s a CO-197 scenario, not CO-167. Confirm the CARC before routing. For the complete operational breakdown of how CO-50 differs from CO-167 in documentation and appeal requirements, One O Seven RCM’s guide to the CO-50 denial code covers every medical necessity appeal element in detail.
PR-167 vs CO-167: Why 140 Billers a Month Search for “PR 167 Denial Code” and What It Actually Means
Billers searching for “PR 167 denial code” are almost always looking for CO-167 guidance. PR-167 and CO-167 use the same reason code (CARC 167) but different group codes. The group code prefix determines who owes the money, and most CO-167 denials carry the CO prefix. The co 167 denial code descriptions from the two group code variants are identical CARC text. Only the financial responsibility differs.
Why Billers Search “PR 167”
PR stands for Patient Responsibility. When CARC 167 appears with the PR prefix instead of CO, the patient owes the adjustment amount, not the provider. In standard commercial insurance billing, CO-167 is the far more common variation. The pr 167 denial code with the PR prefix appears primarily in one specific scenario: Medicare Advance Beneficiary Notice billing.
When a provider correctly issues an Advance Beneficiary Notice before providing a service the patient’s Medicare plan is expected to exclude based on diagnosis, and the patient signs the ABN, the group code can correctly shift to PR. The provider can then bill the patient for the excluded service.
If no ABN was executed before the service, even a PR prefix on CARC 167 doesn’t give the provider the right to bill the patient. The ABN is the prerequisite. The pr 167 denial code without a pre-service ABN on file is still functionally a write-off. For the complete breakdown of prior authorization-related denials including CO-197, One O Seven RCM’s CO-197 denial code guide covers the payer-specific workflow for authorization failures.
What Is PR-177 Denial Code? How CO-177 Differs from CO-167 and Why Billers Confuse Them
PR-177 is the combination of PR (Patient Responsibility) and CARC 177, whose official X12 description reads: “Patient has not met the required eligibility requirements.” PR-177 means the patient owes the balance because they didn’t meet a plan eligibility condition, not because a diagnosis is excluded. Billers searching for PR-177 often land on CO-167 content because CARC 167 and CARC 177 are adjacent in the code set. This section gives you all five adjacent-code query answers in one place. The co 167 denial code and CARC 177 sit two steps apart in the code set.
CO-167 vs CO-177 vs PR-177
Three codes. Three different meanings.
CO-167: Diagnosis not covered. Write off. CO-177: Patient hasn’t met eligibility requirements. Contractual write-off, no patient billing. PR-177: Patient hasn’t met eligibility requirements. Patient owes the balance.
The CARC number (167 vs 177) tells you the reason. The group code prefix (CO vs PR) tells you who pays. The co 177 denial code is an eligibility-class denial, not a diagnosis-class denial. When CO-177 fires, the billing team’s first step is payer eligibility verification, not ICD-10 review. CO-167 and CO-177 are adjacent in the CARC list but require different workflows and different departments to resolve.
CO-177 and CO-167 are not the same code. pr 177 denial code description from X12 reads: “Patient has not met the required eligibility requirements.” pr-177 denial code means the patient owes. CO-177 means the provider writes off. what is pr 177 denial code is a different question from what is CO-167, and they require different resolution paths. Eligibility verification at the front end prevents both CO-177 and certain correctable CO-167 denials. One O Seven RCM’s eligibility verification service runs benefit checks and identifies coverage exclusions before the claim is submitted.
Medicare CO-167 Denial Code: Local Coverage Determinations, NCDs, and When the ABN Changes Everything
Medicare CO-167 denials are almost always LCD-driven. A Local Coverage Determination defines which ICD-10 diagnosis codes justify a given service under Medicare. When the submitted diagnosis isn’t on the LCD’s covered diagnosis list, Medicare issues CO-167 and often accompanies it with RARC N115. The medicare denial code co-167 is distinct from all other CO-167 variants because the LCD lookup step is both mandatory and available through a public tool.
LCDs are issued by Medicare Administrative Contractors at the regional level. NCDs are issued nationally by CMS and apply to all Medicare plans uniformly. CO-167 can fire from either. When RARC N115 accompanies CO-167, it’s always an LCD. When a CMS NCD is the basis, the payer may cite the NCD number in the denial explanation. Medicare Part B LCD-based CO-167 differs from CO-50 in that CO-50 involves medical necessity across any plan, while LCD-based CO-167 is Medicare-specific. They’re not the same workflow.
The Medicare CO-167 Workflow
Step 1: Check the ERA for RARC N115. If present, the denial is LCD-based. Pull the applicable LCD using the CMS Local Coverage Determination search tool.
Step 2: Verify whether the submitted ICD-10 is on the LCD’s covered diagnosis list.
Step 3: If a covered code exists and was not used, correct and resubmit.
Step 4: If no covered code applies, check whether a valid ABN was executed before the service.
Find the applicable LCD for any Medicare procedure through the CMS Local Coverage Determination search tool and confirm which ICD-10 codes the policy covers before resubmitting. The medicare denial code co-167 on a Medicare Part B claim requires this four-step check before any corrected claim or write-off decision is made. Practices billing Medicare Part B home visits, lab services, or DME under CO-167 denials benefit from a dedicated billing audit that identifies LCD-to-diagnosis code mapping gaps before they become chronic denial patterns. One O Seven RCM’s medical billing audit maps your denied codes against current LCD requirements.
How to Resolve a CO-167 Denial Code: The One O Seven RCM Step-by-Step AR Workflow
CO-167 resolution starts before the appeal and before the corrected claim. It starts at the ERA with one diagnostic question: is this denial correctable or non-correctable? Every step after that depends on which path the answer puts you on. The co 167 denial code resolution splits at Step 2, and getting that classification wrong is the most expensive mistake a billing team makes on this denial.
Step 1: Pull the Full ERA and Identify the Accompanying RARC. Open the 835 ERA. Locate the CAS segment in Loop 2110 for the denied service line. Note the CARC (167) and any accompanying RARC. If RARC N115 is present, the denial is LCD-based and the next step is LCD verification. If no RARC accompanies CO-167, review the payer’s denial explanation in the remittance.
Step 2: Classify the Denial: Correctable or Non-Correctable. Review the clinical documentation and the ICD-10 code that was submitted. If the documentation supports a covered diagnosis that was not coded, the denial is correctable. If the correct diagnosis code was used and the plan excludes that diagnosis by benefit design, the denial is non-correctable. Confusing CO-167 with CO-197 at the write-off stage is the most common mistake in denial code classification. They’re different codes with different root causes.
Step 3: Non-Correctable Path: Verify the Exclusion and Write Off. Pull the patient’s benefit document and confirm the diagnosis exclusion is clearly stated. Verify that no ABN was executed before the service. If no ABN exists, write off the CO-167 amount and close the claim. Do not send a patient statement.
Step 4: Correctable Path: Assign the Right ICD-10 Code and Correct the Claim. Obtain the clinical notes. Identify the ICD-10-CM code that matches the documentation and falls within the payer’s covered diagnosis list. Assign the corrected code. Submit a corrected claim using frequency code 7 on the CMS-1500 form with the corrected diagnosis code in Box 21.
Step 5: Submit with Supporting Documentation When Required. If the correctable path requires an appeal rather than a corrected claim, attach the clinical notes, the covered diagnosis code, and the specific payer policy language that supports coverage. Name the LCD or NCD in the appeal letter if the denial was Medicare-based.
Step 6: Track CO-167 by ICD-10 Code to Identify the Prevention Pattern. CO-167 that recurs on the same CPT code across multiple payers signals a systemic ICD-10 selection problem. Log every co-167 denial code by ICD-10 code, service date, and payer. Three or more CO-167 denials on the same CPT code in 90 days require a coding workflow review, not individual claim corrections. The co 167 denial code resolution at Step 6 is the prevention step that stops the denial from recurring.
CO-167 denials that are six or more weeks old and uncorrected are approaching timely filing risk. One O Seven RCM’s denial management services team works every CO-167 denial systematically: classification, corrected claim or appeal preparation, LCD verification for Medicare claims, and pattern analysis to identify the ICD-10 selection gap causing the recurring denial.
How to Prevent CO-167: Six Front-End Fixes That Stop This Denial Before the Claim Is Submitted
Most CO-167 denials are preventable at the point of charge entry. The ICD-10 code that produces a CO-167 was selected before the claim left the practice. Both co 167 and pr 167 denial code scenarios are preventable with the same front-end process. These six front-end checkpoints stop the denial before it reaches the payer, applied before every claim that includes a diagnosis code for a service with known coverage restrictions.
ICD-10 Code Specificity Check: Before submitting, verify the ICD-10-CM code is at the highest specificity level available for the documented diagnosis. NOS, NEC, and unspecified codes that have more specific equivalents should always be replaced with the specified version before the claim leaves the practice.
Payer Coverage Verification: For services known to have coverage restrictions by diagnosis (lab, imaging, DME, certain procedures), verify the submitted ICD-10 code against the payer’s coverage policy before submission. Most payers publish covered diagnosis lists for high-denial services.
LCD and NCD Pre-Check for Medicare Claims: For Medicare claims, run the submitted ICD-10 code against the applicable LCD before every submission. The CMS LCD search tool is searchable by CPT code and MAC jurisdiction. This takes two minutes per claim and prevents the most common CO-167 pattern in Medicare billing.
Diagnosis-to-Procedure Compatibility Scrub: Configure your claim scrubber or clearinghouse to flag ICD-10 codes that are incompatible with the billed CPT code under the applicable payer’s coverage rules. A correctly configured scrubber intercepts the Scenario 3 CO-167 (NOS code substitution) before submission.
Benefit Verification for High-Exclusion Diagnoses: For patients with Bronze-tier, high-deductible, or limited coverage plans, run a full benefit verification that includes excluded diagnosis categories before scheduling services. Patients with plans that exclude obesity diagnoses, cosmetic diagnoses, or fertility diagnoses should have a coverage flag on their account.
ABN Issuance Protocol for Medicare: When the clinical documentation is likely to produce a diagnosis that falls outside the Medicare LCD covered list, issue the ABN before the service is rendered. An ABN executed before the service is the only mechanism that allows the provider to bill the patient when CO-167 fires on a Medicare claim.
Practices with CO-167 appearing more than twice per month on the same CPT code have a systemic ICD-10 selection problem that a billing audit will identify and map to its source. One O Seven RCM’s revenue cycle management services team audits denial patterns, identifies the specific ICD-10 codes producing recurring CO-167, and builds the prevention workflow at the charge entry level.
Frequently Asked Questions: CO-167 Denial Code
What Does CO-167 Mean?
CO-167 means a claim was denied because the diagnosis isn’t covered by the patient’s insurance plan. CO is the Contractual Obligation group code (the provider absorbs the write-off) and 167 is CARC 167, whose official X12 description is: “This (these) diagnosis(es) is (are) not covered.”
Can I Bill the Patient for CO-167?
No. CO-167 carries the CO group code (Contractual Obligation), which means the provider writes off the amount and can’t bill the patient. The only exception is a Medicare claim where a valid Advance Beneficiary Notice was executed before the service.
How Do I Fix a CO-167 Denial Code?
First, determine if the denial is correctable. Pull the clinical notes and check if the submitted ICD-10 code was wrong or unspecified. If a covered diagnosis code applies, correct the claim using frequency code 7 and resubmit. If the diagnosis is excluded by the plan by benefit design, write off the CO-167 amount.
What Is the Official CO-167 Denial Code Description?
The official X12 Claim Adjustment Reason Code 167 description reads: “This (these) diagnosis(es) is (are) not covered. Usage: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.” This code has been active since June 30, 2005 and was last modified July 1, 2017.
What Is the Difference Between CO-167 and CO-50?
CO-50 denies a claim because the service isn’t medically necessary. CO-167 denies a claim because the diagnosis isn’t covered by the plan. A service can be medically necessary and still produce CO-167 if the diagnosis falls outside the plan’s coverage. They require different resolution workflows: medical necessity appeals don’t resolve CO-167.
What Is the PR-167 Denial Code?
PR-167 uses the same reason code as CO-167 (CARC 167: diagnosis not covered) but with the PR group code (Patient Responsibility) instead of CO. PR-167 means the patient owes the adjustment amount. It typically appears when a valid Advance Beneficiary Notice was executed before a Medicare service.
What Is PR-177 Denial Code?
PR-177 combines the PR (Patient Responsibility) group code with CARC 177, whose official X12 description reads: “Patient has not met the required eligibility requirements.” PR-177 means the patient owes the balance because they didn’t meet a plan eligibility condition. It’s different from CO-167, which is a diagnosis coverage exclusion.
Is CO-167 Correctable?
CO-167 is correctable when the denial fired because of an incorrect or unspecified ICD-10 diagnosis code. When a more specific or accurate diagnosis code that the plan covers exists and matches the clinical documentation, correct the claim, assign the right code, and resubmit. When the correct diagnosis was used and it’s excluded by the plan, CO-167 is non-correctable.
Resolve Every CO-167 Denial Right on the First Work Cycle: How One O Seven RCM Does It
You’ve seen the correctable-vs-non-correctable split that determines your entire resolution path. You’ve seen the Medicare LCD workflow that most billing teams skip. You’ve seen the CARC 177 adjacent code that mdclarity.com accidentally captures traffic for because no one explained the difference. The question is how many CO-167 denials are in your AR queue right now with no one working them systematically.
One O Seven RCM’s AR team classifies every CO-167 denial in your queue as correctable or non-correctable on day one. Correctable claims get the right ICD-10 code identified, the corrected claim submitted, and the payer follow-up tracked through to payment. Non-correctable claims get verified and written off cleanly without patient billing compliance risk.
One O Seven RCM’s denial management services cover CO-167 alongside every other high-frequency denial code in your payer mix. Get your free denial code analysis today and find out exactly which ICD-10 codes are producing CO-167 in your claims and what it takes to stop the pattern.
All denial code information in this article is sourced from the X12 Claim Adjustment Reason Code list (list status last reviewed May 1, 2026, code last modified July 1, 2017), the X12 Claim Adjustment Group Code list, and CMS Local Coverage Determination guidance. Denial code behavior is subject to payer-specific policy variations not reflected in X12 standardized definitions. Verify all CO-167 denial resolution protocols with the applicable payer’s provider manual and your Medicare Administrative Contractor before finalizing claim corrections or patient billing decisions.
