Can I bill the patient for a CO 97 denial?

No. CO 97 carries the CO (Contractual Obligation) group code, which under the ANSI X12 835 standard prohibits transferring the adjusted balance to the patient. The payer is asserting that the service is already paid inside another procedure's allowance under a bundling rule you agreed to follow in the participation agreement. Billing the patient for a CO 97 amount can breach the payer contract and, in many states, draw regulatory action. The only routes to revenue are a corrected claim with a permitted modifier or a successful appeal — otherwise the balance is a write-off.

How do I know whether a CO 97 denial can be appealed at all?

Look up the exact code pair in the CMS NCCI Procedure-to-Procedure edit table and read its Correct Coding Modifier Indicator. An indicator of 0 means no modifier can bypass the edit under any circumstance — that CO 97 is final and appealing it wastes staff time. An indicator of 1 means a modifier may bypass the edit when the services were genuinely distinct, so it is potentially recoverable. An indicator of 9 means the edit was deleted effective the same date it started and generally should not have been applied, which is itself grounds for appeal.

What is the difference between modifier 59 and the X{EPSU} modifiers?

Modifier 59 is the general 'distinct procedural service' modifier used to indicate that two procedures NCCI would otherwise bundle were separate — different site, different encounter, or otherwise non-overlapping. The X{EPSU} modifiers are a more specific replacement CMS introduced because modifier 59 was being applied without consistent rigor: XE for a separate encounter, XS for a separate structure or anatomic site, XP for a separate practitioner, and XU for an unusual, non-overlapping service. When one of the X modifiers accurately describes the situation, use it instead of 59 — major payers scrutinize it less. Neither is appropriate unless the documentation shows a genuinely separate service.

Why did an office visit get denied CO 97 when no other procedure was on the claim?

This almost always means the visit fell inside the global period of a procedure performed earlier. Procedures carry a 0, 10, or 90-day global period during which routine related evaluation and management is already paid for in the procedure's fee. An E/M visit inside that window is bundled and denied CO 97. If the visit was genuinely unrelated to the procedure — a different problem, a different diagnosis — modifier 24 on the E/M, supported by the note, is the correction. If the visit was routine post-operative follow-up, the denial is correct.

Denial Code CO 97: NCCI Bundling Edits and When You Can Appeal

Q: Should I send a corrected claim or a formal appeal for CO 97?

Send a corrected claim first when the modifier indicator is 1 and the record supports a distinct service. Append the appropriate modifier to the component (Column 2) code and submit through the payer's corrected-claim process — for electronic claims, that is claim frequency code 7, not a new original claim, which will reject as a duplicate. Escalate to a formal written appeal when the corrected claim is denied again, when the indicator is 9, or when you believe the edit was misapplied. The appeal needs the operative or encounter note, the diagnoses, a brief explanation of the distinction, and a citation to the NCCI table entry.

A CO 97 denial tells you the payer folded the payment for one billed procedure into the allowance for another procedure on the same claim. The official CARC text is "The benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated." It is not saying the service was billed in error. It is saying a bundling rule applied.

Because CO 97 carries the CO (Contractual Obligation) group code, the adjusted balance cannot be moved to the patient. That leaves two honest outcomes for every CO 97 line: either the bundle was correct and the balance is a write-off, or the two services were genuinely distinct, the edit permits a modifier, and the documentation supports it — in which case the line is recoverable with a corrected claim or an appeal.

The difference between those outcomes is decided by two things: the National Correct Coding Initiative (NCCI) modifier indicator on the specific code pair, and whether the medical record actually shows two separate services. This guide walks the decision in order so your team stops appealing lines that can never be paid and stops writing off lines that should be.

What CO 97 Means

CO 97 means the payer determined that one billed code is a component of another code on the same claim and bundled its payment into the primary code. The X12 definition adopted by CMS reads:

"The benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated. Note: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present."

Three mechanisms produce a CO 97:

NCCI Procedure-to-Procedure (PTP) edits. CMS maintains tables that pair a Column 1 (comprehensive) code with a Column 2 (component) code. When both are billed for the same patient on the same date, the Column 2 code is denied under CO 97 unless a permitted modifier is attached.
The global surgical package. A procedure with a 0, 10, or 90-day global period includes routine pre-operative and post-operative care. An evaluation and management (E/M) visit or a minor service that falls inside that window is bundled and denied CO 97.
Payer-specific bundling policy. Commercial plans layer their own clinical-editing rules on top of NCCI, so a pair that pays for one payer can bundle for another.

The 835 Healthcare Policy Identification Segment named in the definition often carries the policy or edit reference the payer used — read it before doing anything else, the same way a CO 16 denial is worked from its paired remark code rather than from the CO 16 line alone.

Step 1: Read the NCCI Modifier Indicator

Before touching the claim, look up the exact code pair in the CMS NCCI PTP edit table and read its Correct Coding Modifier Indicator (CCMI). This single value decides whether an appeal is even possible.

CCMI	Meaning	What it means for you
0	A modifier cannot bypass the edit under any circumstance	Hard bundle. Do not append a modifier and do not appeal. Write off the CO 97 balance.
1	A modifier may bypass the edit in appropriate circumstances	Recoverable only if the record shows a genuinely distinct service. Proceed to Step 2.
9	The indicator does not apply (the edit was deleted effective the same date it began)	The edit should not have been applied. Appeal on that basis.

The CCMI is published by CMS in the quarterly PTP edit files. A pair with indicator 0 is settled — chasing it wastes the same staff time you need for the lines that can actually be paid.

Step 2: Confirm the Services Were Genuinely Distinct

An indicator of 1 permits a modifier; it does not justify one. The modifier is only appropriate when the medical record shows the two services were separate — a different anatomic site, a separate incision, a separate encounter on the same day, a different practitioner, or a service unrelated to the primary procedure. Appending a bypass modifier to a service that was not actually distinct is not an aggressive billing tactic; it is a misrepresentation that carries False Claims Act exposure. The CMS NCCI Policy Manual is explicit that these modifiers are not to be used to routinely bypass edits.

Work from the operative note, the encounter note, and the diagnoses — not from the fee schedule. Ask whether an auditor reading only the documentation would see two services. If the answer is no, the CO 97 stands and the balance is a write-off.

Which Modifier the Situation Calls For

The right modifier depends on what was bundled, and choosing the wrong one is itself a denial reason. The categories, without prescribing one for any specific code pair:

Two distinct procedures bundled by a PTP edit. Modifier 59 (Distinct Procedural Service) or, preferably, the more specific X{EPSU} subset: XE (separate encounter), XS (separate structure or site), XP (separate practitioner), XU (unusual, non-overlapping service). CMS created the X modifiers to add the precision that modifier 59 was losing through overuse, and major payers audit them less aggressively.
A significant, separately identifiable E/M on the same day as a minor procedure. Modifier 25 on the E/M — not modifier 59.
An E/M during a procedure's global period that is unrelated to that procedure. Modifier 24 on the E/M, supported by a distinct diagnosis and note.

Step 3: Correct or Appeal

When the indicator is 1 and the documentation supports a distinct service, submit a corrected claim with the appropriate modifier on the component (Column 2) code — this is faster than a formal appeal and is what most payers expect first. Use the payer's corrected-claim process (for electronic claims, frequency code 7), not a brand-new original claim, which will reject as a duplicate.

Move to a formal written appeal when the corrected claim is denied again, when the indicator is 9, or when you believe the edit was misapplied. The appeal should include the operative or encounter note, the relevant diagnoses, a short statement of why the services were distinct, and a citation to the NCCI PTP table entry and its indicator. Vague notes do not survive a bundling appeal.

When the indicator is 0, or when the record does not support a distinct service, accept the bundled payment and write off the CO 97 balance. Do not bill the patient — the CO group code prohibits it.

Preventing CO 97

CO 97 is one of the most preventable denials because the edit tables are public and static between quarterly updates.

Load NCCI PTP edits into your scrubber. Flag known Column 1 / Column 2 pairs at charge entry so the coder decides on a modifier before the claim transmits, not after a denial.
Refresh the edits every quarter. CMS updates the PTP files four times a year; a stale table produces both missed bundles and false flags.
Track global periods at the patient level. Hold or flag E/M and minor-procedure claims that fall inside an open global window so modifier 24 or 25 is considered deliberately.
Audit modifier 59 and X{EPSU} usage. A rising bypass-modifier rate without matching documentation is the pattern payers and auditors look for. Sample these claims internally before someone else does.

You can confirm the group code and liability for CO 97 and other adjustment reason codes with the denial code lookup.