CO 50: Non-covered services not deemed a medical necessity

CO 50, the sixth most frequent reason for Medicare claim denials, is defined as: “non-covered services because this is not deemed a ‘medical necessity’ by the payer.”

When this denial is received, it means Medicare does not consider the item that was billed as medically necessary for the patient.

A CO 50 denial cannot be resubmitted. It must be sent to redetermination. If you do not send the claim to redetermination within 120 days of the date of the denial, you have missed the timely filing deadline and will need to write off the claim.

Here are a few circumstances to be aware of:

• If a claim is billed to Medicare without a KX modifier, it will be denied with the CO 50 denial. When you add the KX modifier, that states to Medicare that the specified medical necessity documentation is on file within the patient’s medical record and that the patient meets the specified coverage criteria as outlined by the Local Coverage Determination.
• Sometimes when an oxygen concentrator (E1390) and an oxygen portable unit (E0431) are billed together, the concentrator will be paid and the portable unit will be denied with a CO50. This may occur due to the following answers on the CMN: 1) Question 3 was answered with “During Sleep,” or 2) Question 4 was answered with an N (no) or D (does not apply).

Unless the doctor can prove that he/she answered those questions in error via proof in their chart notes and an additional letter stating their error, the claim will not be reimbursed.

However, if you provided the portable system with knowledge of the impending denial, you should have received a signed ABN (Advanced Beneficiary Notice) at the time of delivery and added a GA modifier to the claim prior to submission. If the item was delivered and no ABN was obtained, then you cannot bill the patient.

Sarah Hanna is a reimbursement consultant and vice president of ECS Billing & Consulting, Tiffin, Ohio, and specializes in proper billing protocols, Medicare coverage guidelines and billing office procedures. She can be contacted at 419/448-5332 or [email protected].

Based on analysis of 3,680,443 claims adjudicated by the Medicare contractors between July 1, 2006, and Sept. 30, 2006, and processed for RemitDATA customers. Source: RemitDATA, 866/885-2974, www.remitdata.com.