CO 97 Denial Code: What It Means & How to Fix It (2026)

What Does CO 97 Denial Code Mean?

CO 97 (Claim Adjustment Reason Code 97) means: "The benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated."

In plain English: the payer says this service is bundled into another service or procedure that has already been adjudicated, usually one on the same claim or date of service, or a surgery whose global period covers it. The payer pays for that service and treats this one as already included.

Why You Received CO 97

Medicare and Medicaid use National Correct Coding Initiative (NCCI) edits to identify procedure codes that should not be billed separately, and commercial payers apply their own claim-editing rules, which may differ from NCCI. Common reasons include:

• Component/comprehensive bundling — You billed a component procedure separately from the comprehensive procedure that includes it
• Mutually exclusive procedures — Two procedures that normally wouldn't be performed together in the same session
• Not a duplicate: a true duplicate claim or service is denied with CARC 18 (exact duplicate claim/service), not CO 97, so a CO 97 means the payer sees the service as part of another one, not as a repeat
• Global surgical period — The service falls within the global period of a previous surgery

Common CO 97 Bundling Examples

Example 1: E/M with Procedure

• Billed: 99213 (Office visit) + 11102 (Skin biopsy)
• Denied: 99213 with CO 97
• Why: E/M is bundled into the biopsy unless the visit was separately identifiable
• Fix: Add modifier 25 to the E/M code if the visit was distinct from the biopsy

Example 2: Lab Panels

• Billed: 80053 (Comprehensive metabolic panel) + 82947 (Glucose)
• Denied: 82947 with CO 97
• Why: Glucose is a component of the CMP
• Fix: This is correct bundling — glucose cannot be billed separately with CMP

Example 3: Surgical Procedures

• Billed: 29881 (Knee arthroscopy with meniscectomy) + 29877 (Chondroplasty)
• Denied: 29877 with CO 97
• Why: NCCI edits bundle these together
• Fix: Usually none. The Medicare NCCI Policy Manual (Chapter IV) says 29881 already includes chondroplasty in any compartment of the knee and that 29877 is not reported with other knee arthroscopy codes, so adding modifier 59 or XS here would be unbundling. For Medicare, HCPCS G0289 can be reported with 29881 only for removal of a loose body or foreign body from a different compartment of the same knee

How to Appeal a CO 97 Denial

Step 1: Check NCCI Edits

Look up the code pair on the CMS NCCI Lookup Tool. Check if a modifier is allowed to unbundle.

Step 2: Determine if Modifier is Appropriate

• Modifier 59 (Distinct Procedural Service) — The denied procedure was distinct from the primary procedure (different site, different session, different encounter)
• Modifier 25 (Significant, Separately Identifiable E/M) — The E/M visit was above and beyond the procedure
• XE, XS, XP, XU modifiers — More specific alternatives to modifier 59

Step 3: Resubmit or Appeal

• If modifier was missing → Resubmit as corrected claim with appropriate modifier
• If modifier was already on the claim → Appeal with operative report or clinical notes showing the services were distinct
• If bundling is correct → Do not appeal; the payer is applying NCCI edits correctly

When NOT to Appeal CO 97

Not every CO 97 denial is wrong. Do not appeal if:

• The denied code is truly a component of the comprehensive code
• The services were not performed in distinct anatomical sites or separate sessions
• Adding a modifier would be inappropriate unbundling (which is a compliance risk)

CO 97 vs Related Denial Codes

Prevention Tips

• Check NCCI edits before billing — Use the CMS NCCI Lookup Tool before submitting claims with multiple procedure codes
• Use appropriate modifiers proactively — Add modifier 59/XS when procedures are genuinely distinct
• Document distinctness — Operative reports should clearly document separate sites, sessions, or encounters
• Don't unbundle inappropriately — Incorrect use of modifier 59 is a compliance risk and audit trigger

Need Help With Bundling Denials?

Many CO 97 denials are fixed with a corrected claim that carries the right modifier, and some need no action because the bundling is correct. EZAppeal sorts the denials on an 835 into next steps for free, so you can see which ones need a corrected claim and which are worth appealing. When an appeal is the right step, it drafts the letter in a few minutes, citing the payer's policy when one is on file, for your team to review and send. Start free →

Related Denial Code Guides

• Complete CARC & RARC Denial Code Reference Guide
• CO 50 Denial Code Guide — Medical necessity
• CO 11 Denial Code Guide — Diagnosis mismatch
• CO 16 Denial Code Guide — Missing information
• CO 97 Denial Code Guide — Bundling/NCCI edits
• MA01 Remark Code Guide: Appeal rights alert
• N479 Remark Code Guide: Missing EOB (coordination of benefits or Medicare Secondary Payer)