CO-256: Service not payable per managed care contract
CO-256 says the service is not payable under the plan's contract with the network. It usually means the provider is out of network for your plan and the contract does not require the plan to pay them for the service.
What your letter emphasized
- Whether the provider was in-network at the date of service
- If out-of-network, whether an exception applies (emergency care, no in-network provider available in your area, referral by an in-network provider)
- No Surprises Act protection if applicable
- Whether the plan's network is adequate under state or federal standards
What the insurer's likely response is
Reversal on network correction. If the provider was actually in-network but the plan misclassified them, the plan often reverses.
Approval with out-of-network benefit level. If the plan has out-of-network benefits and applies them, the claim is paid at a lower rate. You may still owe balance billing depending on the state.
Upheld with no benefit. If your plan is HMO-only (no out-of-network benefits) and no exception applies, this is a hard appeal.
No Surprises Act protection triggered. For emergency services and certain non-emergency services at in-network facilities, NSA protections apply and the plan must cover.
How to handle each outcome
Reversal: confirm reprocessing.
Out-of-network benefit applied: decide whether the balance is worth further appeal. If it is, address either (a) network-adequacy failure that forced you out of network, or (b) referral by an in-network provider.
Upheld with no benefit: the strongest arguments are network adequacy and NSA. See below.
NSA protection: file an NSA-specific dispute at cms.gov/nosurprises. Do not just appeal to the plan.
Network adequacy
Federal and state law require plans to maintain adequate provider networks. If you can show:
- No in-network provider offered the specialty care needed in a reasonable time or distance
- The in-network specialists were not accepting new patients
- The in-network specialists lacked the credentials or subspecialty needed
then the plan may be required to cover out-of-network care at in-network rates. The specific standard varies by plan type and state, but this is a real argument.
Documentation you need:
- Screenshots of the plan's own provider directory showing no available options in your area
- Records of calls to in-network providers who declined or had no availability
- Confirmation that the specific specialty needed was not represented in-network
Emergency services
Under 42 USC 300gg-19a and the NSA, plans must cover emergency services regardless of network status, at in-network cost sharing. If your CO-256 relates to emergency care, cite these authorities.
No Surprises Act at in-network facilities
Under the NSA, if you receive care at an in-network hospital or ambulatory surgical center from an out-of-network provider (an anesthesiologist, a radiologist, a pathologist, an assistant surgeon), the plan must generally cover the out-of-network provider's services at in-network cost sharing. Exception: if you signed a valid NSA notice-and-consent form, the protection is waived.
In-network provider referral
Some plans require the plan to cover an out-of-network referral by an in-network provider if the referral is medically necessary and no in-network option exists. Read your plan document for referral rules.
What to gather
- The plan's original denial letter
- The plan's provider directory as of the date of service (or the date of care planning)
- Records of your attempts to find in-network care
- The in-network referring provider's referral, if applicable
- The emergency-department admission record, if applicable
When to escalate
State DOI complaint is the right escalation for CO-256 denials involving network adequacy or NSA violations. The federal NSA dispute process is separate and specifically designed for surprise-billing situations. External review may apply if the denial has a medical-judgment component.