CO 18 denial code in the medical billing practice indicates a contractual denial. Simply put, it means that the services rendered by a healthcare provider do not come under cover of the patient’s insurance policy. There are many reasons for this: The service may have been considered unnecessary, or outside the network, or simply excluded from the patient’s benefits.

CO 18 denial code simply tells the provider that the insurance company is not liable to pay for the service billed because the service does not meet the terms of the insurance contract. Such denials are often frustrating for providers because they don’t offer any further explanation as to why the service is not covered; they only refer to the patient’s insurance policy.

Why Do You Get a CO 18 Denial Code?

A CO 18 denial code is generally generated for one or for any combination of the following reasons:

1. Services Received from Providers Outside the Network:

Patient receives services from a provider not in the plan’s network, the insurance may deny the reimbursement claim and code it CO 18. Most health insurances generally have above provisions with the reimbursement levels for services from outside the provider network.

2. Excluded Services:

The rest of the standard exclusions under medical insurance plans typically include the out-of-pocket expenditure only on certain elective procedures, cosmetic methods, or experimental treatment types.

3. Medically Necessary:

In this case, they will not pay for this CO 18 denial code to add as usually an explanation if needed treatment was deemed unnecessary by the insurance company on their own guidelines.

4. Preauthorization Issues:

Some services should be preauthorization before they can be billed to an insurance company. If a healthcare provider does not do this step, a CO 18 denial code will be used by the insurance.

5. Outdated or Incorrect Contract Terms:

Sometimes, the denial may arise from the following condition: the relevant contract terms between the provider and insurer are not up-to-date due to lack of expiration of contract, change in insurance policy coverage.

How to Resolve CO 18 Denial Code

Systematic approach is required for the resolution of a denial code-serious like CO 18. Following systems can be put in place by healthcare providers to remedy the error:

Step 1: Examination of the Explanation of Benefits (EOB)

Take the first action to put time and attention on understanding the Explanation of Benefits (EOB) or the denial notice from the insurance company. Statement for CO 18 denial code will be there-in all likelihood, in addition to other information or particulars about why the claim will be denied. Thorough examination of this information is a key to understanding the real reason for the denial.

Step 2: Determine Patient’s Policy

If you have confirmed all of these details in the EOB, it should be noted that the next step is checking the patient insurance policy details. This should include coverage details for the exact denied services, confirming whether the procedure is insured, checking for any stipulations such as out-of-network coverage and exclusions. If the service is not covered, educate the patient on their benefits and alternative options.

Step 3: Contact the Insurance Company

If you have a different opinion about the denial or require further clarification, the next thing that you need to do is to call up the insurance company. A representative can help you in understanding denial in detail and possibly guide you through the steps required to resolve it. Keep detailed records of everything that has been communicated to the insurance company.

Step 4 Appeal Denial

You can appeal if denial happens because of a correctable issue ei missing information or wrong coding. Submit all documentation demonstrating medical necessity for the service or address any discrepancies in the original claim with your appeal. Add evidence or provide clarifications to insurance company relevant to CO 18 denial code.

Step 5: Resubmit the claim

Making all the necessary checks and revisions, send the claim again to the insurance company. All information must be complete and accurate to avoid further claims rejections. Depending on the process on how the claims are handled by the insurer, it could take from a few days to weeks for the claims to be reprocessed, and payment given.

Common Mistakes That Lead to CO 18 Denial Code

Common, general mistakes that may lead to CO 18 denial code are:

• Wrong Procedure Codes: If a healthcare provider submits the wrong code for the service performed, the insurance company may not consider that service and may deny payment.
• Preauthorization Was Not Obtained: Some services require some pre-approval by the insurance company before performing them. Not getting that pre-approval can lead to a CO 18 denial code.
• Out-of-Network Providers: If a patient seeks care from a provider out of a patient’s insurance network, then the claim may get denied with the CO 18 denial code. This is especially true for insurance plans that cover in-network services only.
• Fails to Meet Medical Necessity Requirement: If the service is not in accordance with the standards for what constitutes medical necessity with an insurance company, the company may reject the claim with a CO 18 denial code.

Preventing CO 18 Denial Code

While some denials may be unavoidable, there are several preventive measures that a provider can take so as not to incur a denial code CO 18.

1. Verify Coverage Prior to Treatment

Insurance coverage for the service must be verified; it is essential that the patient’s policy provides coverage for the treatment or procedure that is to be provided. Denials can be avoided by verifying whether the provider network of the patient is applicable and whether preauthorization is necessary.

2. Preauthorization

Always obtain preauthorization from the insurance company for services when required. This may prevent a CO 18 denial code from being given later.

3. Use Correct Billing Codes

Make sure that correct billing and procedure codes are used on claims. Incorrect coding is one of the most common reasons for denials; therefore, staying abreast of coding changes and accurately reflecting the services provided is key.

4. Advise Patients About Their Insurance Benefits

In some cases, patients are not educated about the specifics of their insurance plan. Reviewing coverage with the patient and explaining the specific services that are covered can help to avoid denials regarding out-of-network care or services that are otherwise excluded.

5. Claim Monitoring

Finally, make it a point to routinely monitor the claims that have been submitted and address any denials or issues as and when they arise. This will allow you to resolve issues faster before they evolve into actual full-blown problems.

Conclusion

By understanding the reasons that lead to CO 18 denial codes and anticipating the denial in advance, it can be very beneficial for providers-who are equipped with adequate knowledge and skill-influence the denial resolution process. The key provisions regarding claims management relate to proactive prevention before denial results occur, analyzing and understanding the course of events that led to a denial, and adopting methods of appealing decisions as necessary. These measures, when carefully followed, ensure very minimal upheaval in cash flows, and equate cash ins with cash outflow over services rendered.