CO-167 Denial Code: Diagnosis Not Covered, and How to Fix It

What is the CO-167 denial code? CO-167 is a Claim Adjustment Reason Code (CARC) stating that the diagnosis or diagnoses on the claim are not covered, carried under the Contractual Obligation group so the denied amount is generally not billable to the patient.

Undeny's Take

CO-167 is a matching problem between two lists: the diagnoses on your claim line and the diagnoses the coverage policy accepts. Start with the remark code, because it tells you which policy family to open (on Medicare, N386 points to a National Coverage Determination and N115 to a Local Coverage Determination). Then there are only three honest outcomes. The chart supports a covered diagnosis you did not bill: correct the line. The chart supports only the diagnosis you billed: the denial is right, so write it off, and next time issue an ABN if you expect it. The policy should apply and the payer misread it: appeal. What you must not do is swap in a covered diagnosis the notes do not support; that turns a denial into a compliance problem.

What CO-167 Means and Where CMS Uses It

The X12 description reads: "This (these) diagnosis(es) is (are) not covered." Its usage note tells payers to refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present, which is where a payer can name the exact policy it applied.

CMS writes CARC 167 into several national coverage instructions. In the Medicare Claims Processing Manual, Chapter 18 (section 200.4), contractors deny intensive behavioral therapy for obesity, HCPCS G0447 or G0473, billed without one of the ICD-10-CM body mass index codes Z68.30 to Z68.39 or Z68.41 to Z68.45, using CARC 167 with remark N386. Chapter 13 (section 60.19) uses CARC 167 when a contractor, deciding coverage locally, finds a PET scan with a newer radiopharmaceutical non-covered. In both, the group is PR if the claim carries a GA modifier (signed ABN on file) and CO otherwise.

Why Diagnosis-Based Coverage Denials Happen

• The diagnosis is not on the policy's covered list. First Coast, a Medicare contractor, describes diagnosis denials as a procedure "billed with an incompatible diagnosis for payment purposes" where the ICD-10 codes are not covered under an LCD or NCD.
• A required secondary diagnosis is missing. The obesity-counseling rule above is an example: the service needs a qualifying BMI code alongside the primary diagnosis.
• The covered diagnosis is in the notes but not on the claim. First Coast's first fix is to correct the diagnosis when a payable one is documented in the encounter notes.
• A commercial plan applied its own diagnosis policy, which the 835 policy reference or a remark code should identify.

How to Fix and Appeal a CO-167

1. Read the CARC, the remark code and any policy reference on the 835 to identify the NCD, LCD or payer policy that was applied.
2. Pull that policy's covered ICD-10-CM list. For Medicare, Noridian points billers to the Medicare Coverage Database and the contractor's active LCDs.
3. Compare it with the encounter notes for that date of service, reporting only diagnoses documented for that date.
4. If a covered diagnosis was documented but not billed, correct and resubmit only the denied lines. First Coast warns not to resubmit an entire claim after a partial payment, and Medicare treats clerical errors and omissions as reopenings.
5. If the billed diagnosis is accurate and the policy's criteria were met, request a redetermination with the notes and the policy citation, or draft it in the appeal generator.
6. If the service is not covered for that diagnosis and will recur, give the patient an ABN before future visits so a denial can be assigned to them with the GA modifier.

CO-167 Next to CO-11, CO-50, CO-96 and PR-50

CO-11 means the diagnosis is inconsistent with the procedure, a coding mismatch rather than a coverage list. CO-50 is the broader medical-necessity denial; Medicare contractors also use it for LCD diagnosis problems; Noridian, for example, pairs it with N115. CO-96 is a general non-covered charge that requires a remark code. PR-50 and PR-167 appear when a valid ABN shifted the liability to the patient. A missing or invalid diagnosis is a different problem, reported with codes such as CO-16 (claim lacks information or has submission errors).

Frequently Asked Questions

What is the difference between CO-167 and CO-11?

CO-167 says the diagnosis is not covered for the service under the payer's policy. CO-11 says the diagnosis is inconsistent with the procedure, a mismatch between what was coded and what was done. CO-167 is usually solved with the policy's covered-diagnosis list, CO-11 with a coding review.

Can I change the diagnosis to fix a CO-167?

Only to a diagnosis the medical record documents for that date of service. If the notes support a covered code that was left off, correcting the claim is appropriate. Replacing an accurate diagnosis with a covered one the notes do not support is a compliance risk, not a fix.

Can I bill the patient for a CO-167 denial?

Not under the CO group. In the Medicare instructions that use CARC 167, the patient is liable only when the claim carries a GA modifier showing a signed ABN was on file; otherwise it is the provider's liability. For commercial plans, check your contract.

What do N386 and N115 mean next to CO-167?

They name the type of policy behind the denial. N386 says the decision was based on a National Coverage Determination, and N115 says it was based on a Local Coverage Determination. Both direct you to the Medicare Coverage Database to read the policy.

Informational only, not legal, medical, or billing advice. Always verify against your current payer contract and policy.

Turn a CO-167 into a paid claim

Undeny drafts a policy-based diagnosis appeal from your notes in seconds. Generate an appeal · Browse denial codes