Denials in healthcare claims and billing are among the most common headaches for providers and medical practices. Of all the denial codes that could appear, CO 226 frequently creates confusion. So, what does CO-226 denial code description mean, and how can you effectively address it? Let’s break it down and explore the intricacies of CO 226, ensuring you have the right tools to tackle it.

CO-226 Denial Description?

CO 226 is a non-coverage code under Medicare and other insurance plans as it denotes a non-reimbursable charge. It simply means that what was submitted in the claim as a service or procedure does not qualify for this insurance plan’s reimbursement under its policy coverage either because it is not considered medically necessary or it is out of specific policy coverage, and in some cases, as not meeting the insurer set criteria.

The full CO-226 denial code description generally reads something like this:
“This service/procedure is not covered under the patient’s plan.”
While that sounds simple, understanding why this code pops up is key to resolving it swiftly.

Why Do Claims Get Denied with CO 226?

CO 226 can be triggered for several reasons. Here are some common causes:

1. Noncovered Services

Sometimes, the patient’s health plan doesn’t cover a medical service or procedure. For example:

• Cosmetic treatments: These usually are not covered in elective cosmetic surgery or the treatments not necessary medically.
• Experimental treatments: Those considered still in a clinical trial or experimental.
• Routine examination: Preventive services outside of benefits might also necessitate the issuance of CO 226.

2. Out-of-Network Providers

If a patient receives care from an out-of-network provider without prior approval, the insurer might deny the claim with CO 226. Even if the patient has a plan with out-of-network benefits, the insurer could reject the claim because the provider is not part of their approved network.

3. Policy Limitations

Some insurance policies have specific limitations, like a cap on the number of visits, days, or procedures covered in a given period. If the patient has already exceeded these limits, the insurer might deny additional charges under CO 226.

4. Billing Errors

Inaccurate or incomplete claims might trigger a CO 226. This could include issues like:

• Incorrect coding or procedure codes (CPT or ICD-10 codes).
• Incomplete documentation to support the claim.
• Services presented that do not align with the patient’s diagnosis.

5. No Medical Necessity

A treatment or service will not be deemed medically necessary, and a claim can be denied with the use of a CO 226. This happens when the treatment is considered unnecessary in dealing with a patient’s condition according to clinical practices and insurance standards.

How to handle CO 226 denial code

So, what should you do when you get a CO 226 denial code? Follow this step-by-step guide on how to resolve it promptly:

Step 1: Review the Denial Notice

Always review the explanation of benefits (EOB) or the denial letter. Find out if further information is provided, such as specific reasons for denial or missing information.

Step 2: Verify the Coverage

Reconcile the patient’s insurance to confirm the service being billed is an eligible covered benefit. You might have to:

• Contact the insurance company to check if the procedure is covered under the patient’s plan.
• Review the patient’s benefits to see if there are any limitations.

Step 3: Check Billing Errors

Errors do happen. Check the codes you used in the claim:

• CPT/HCPCS codes: Ensure they are valid and applicable to the service rendered.
• ICD-10 codes: Ensure that the diagnosis code matches the procedure.
• Modifiers: Ensure the proper modifiers are utilized (if necessary).

Step 4: Appeal the Denial

You can appeal if you feel that the claim was denied in error or if there is a valid argument for the procedure to be medically necessary. The appeal should contain:

• Documentation that includes medical records, letters from the healthcare provider, or clinical justification showing that the service was medically necessary.
• An explanation of why the service should be covered based on the patient’s condition and the insurance policy.

Step 5: Resubmit the Claim

You can generally correct and resubmit the claim if it is a minor clerical error or lack of some information. Ensure the corrected claim meets all the requirements and will not be denied again.

Step 6: Inform the Patient

Sometimes, even after your best efforts, the insurer won’t change its decision. Under such incidences, ensure the patient is informed. Under your status, you have to provide that there could be two things to share with this patient: he must pay out entirely, or you have his insurance that pays partially while you plan on seeing another way for him.

CO 226 Denial Code Prevention Tips

Prevention is always better than dealing with denials down the road. Here are some proactive steps to reduce the likelihood of receiving a CO 226 denial code in the future:

• Verify that the patient benefits during service to ensure the procedure or service is covered.
• Pre-authorize services when necessary. Contacting the insurance company for pre-authorization for non-emergency procedures can help prevent denials.
• Use correct and specific coding. Correctly document and code all services, diagnoses, and procedures. Always double-check if you are unsure by referring to the latest guidelines.
• Be aware of any changes in insurance policies. Insurance policies often change coverage, so keeping up to date can help you not be caught off guard.
• Train your staff in proper billing. Ensure your staff is informed about medical billing and claims submission nuances.

How Medatron Helps Healthcare Providers Manage and Correct CO 226 Denials

Medatron can particularly help healthcare providers manage and reduce CO 226 denial code by automating essential steps in the entire billing and claims process. Medatron features automated claim scrubbing, which, among other things, ascertains that claims presented do not contain coding errors, missing modifiers, and incorrect procedure codes before any claim is submitted to enhance the reduction of noncovered charges. Moreover, its real-time eligibility verification tool verifies patient insurance coverage and benefits before service delivery, eliminating denied claims for noncovered services. In the event of a denial, Medatron’s Denial Management Services offers practices a detailed view, thus enabling them to promptly rectify issues and resubmit claims, raising reimbursement rates and minimizing administrative burden.

Conclusion

CO 226 denials can be challenging for healthcare providers, but understanding the causes and the right tools to address them is key to reducing their frequency. By ensuring accurate coding, verifying insurance coverage, and staying on top of policy changes, practices can significantly minimize the likelihood of receiving noncovered charge denials. Tools like Medatron are involved in making submissions for smooth claims, ensuring real-time verification of patient benefits, and automatic management of denials. Once all these tools are utilized, healthcare providers can streamline their CO 226 denial code processes, reduce administrative burdens, and eventually improve the reimbursement rate. In essence, staying proactive while utilizing technology will ensure smooth billing operations and a healthy bottom line for medical practices.