CO-97: Payment is included in the allowance for another service/procedure

CO-97 is a bundling denial. The plan is saying that the service you were billed for is already included in the payment for a different service on the same claim. Usually the fix is a modifier the provider should add, and the appeal is really a coordination between you, the provider, and the plan.

What your letter emphasized

• Whether the two services are separately billable under CMS coding guidelines
• Whether the correct modifier was applied (Modifier 25 for a significant, separately identifiable evaluation and management service; Modifier 59 for a distinct procedural service)
• The provider's operative or procedure note showing the two services were distinct
• The plan's obligation to reprocess when the bundling determination was in error

What the insurer's likely response is

Reversal with modifier. If the provider resubmits with the correct modifier, the plan often reprocesses and pays.

Upheld citing CMS coding guidelines. The plan writes back citing the National Correct Coding Initiative (NCCI) edits that bundle the two services. Read carefully. NCCI edits sometimes allow a modifier override; sometimes they do not.

Request for documentation. The plan asks for the procedure note showing the services were distinct.

Recoded to a different denial. Rare but possible if the plan drops CO-97 and switches to a different reason.

How to handle each outcome

Reversal: confirm reprocessing and payment. Verify the provider has the updated remittance.

Upheld citing NCCI: research the specific NCCI edit. Look up the edit at the CMS NCCI tool. If the edit allows modifier override, escalate to second-level with the modifier applied and the procedure note attached.

Request for documentation: provide the operative or procedure note showing the services were distinct. If both services required separate clinical decision-making, note that in the response.

Recoded: demand the plan pick a lane and respond to the new denial under 29 CFR 2560.503-1.

The provider's role

CO-97 denials are usually best handled with the provider's billing office in the loop. Ask them:

• Which two services the plan is bundling
• Whether the correct modifier was applied on the original submission
• Whether they can resubmit with a corrected modifier
• Whether they have the operative or procedure note to support the modifier

Many providers will resubmit the claim without a formal appeal from you. Ask before you spend energy on a full appeal.

When it is really your appeal

• The provider will not resubmit and you are being billed for the CO-97 amount
• The two services were on different dates of service and the plan bundled them incorrectly
• The plan is applying a bundling rule that does not appear in NCCI or the plan document

What to gather

• The full EOB showing both services and the CO-97 adjustment
• The provider's procedure note or operative report
• The CPT/HCPCS codes for both services
• If applicable, the NCCI edit and its exception rules

Sample argument for the letter

"The two services at issue, [CPT 1] and [CPT 2], were performed on the same date but were clinically distinct. [CPT 1] was for [description], while [CPT 2] was for [description]. Modifier [25 or 59] was correctly applied to reflect this. The plan's application of CO-97 in this case does not conform to CMS coding guidelines because [reason]. I request that the plan reprocess the claim with recognition of the modifier."

When to escalate

• If the provider will not help, and the plan will not reverse, external review may not apply because bundling is not a medical-judgment determination
• State DOI complaint is often the right escalation for bundling disputes
• Small claims court is an option if the provider is billing you an amount they should have written off