CO-96

CARC CO-96: Non-Covered Charge — DME Appeal Guide

Typical overturn odds: 30–55%

What this denial means

CO-96 means the payer determined the billed service is not covered under the patient's insurance plan. Unlike CO-50 (which disputes medical necessity), CO-96 is a coverage determination — the plan simply doesn't cover this type of equipment or service for this patient.

Why DME claims hit CO-96

Plan exclusion. Patient's commercial plan explicitly excludes certain DME categories. Many HMO and marketplace plans have narrow DME coverage lists.
Wrong coding. The HCPCS code used doesn't align with the item's actual description, making it look like a non-covered item.
Missing modifier or wrong modifier. Modifiers like KX (meets LCD criteria), NU (purchased new), or RR (rental) affect how the payer categorizes the service. Wrong modifier = non-covered determination.
Service falls under plan exclusion even if medically necessary. Medicare covers most DME, but commercial plans may exclude items Medicare does cover (e.g., certain orthotics, non-DMEPOS supplies).
Modifier-diagnosis mismatch. The diagnosis code doesn't align with the LCD coverage criteria for the HCPCS billed — even if both are clinically appropriate.

How to fix it

Check the plan's actual coverage list. Obtain the patient's plan documents or call the payer and ask specifically: "Is HCPCS [code] covered under this plan for diagnosis [ICD-10]?" Get the answer in writing.
Audit the HCPCS code selection. Confirm you're using the most specific, accurate code for the item delivered. A misclassified item that falls in a non-covered category generates CO-96 even if the correct code would be covered.
Check the modifier set. Add KX if the LCD criteria are met and documented. Verify NU/RR/RA modifier appropriateness.
If coverage exists under correct coding: Resubmit with the corrected code and modifiers. Attach a brief note explaining the resubmission reason.
If the item is genuinely excluded: Explore patient payment options, check secondary coverage, or advise the patient before delivering future equipment.

Typical overturn likelihood

30–55% — better than CO-50 when the denial resulted from a coding error. Cases where the plan genuinely excludes the service have very low overturn rates absent a plan document error.

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Frequently asked questions

What's the difference between CO-96 and CO-50?

CO-50 = the service is covered by the plan, but not medically necessary for this patient. CO-96 = the service isn't covered by the plan at all, regardless of medical necessity.

Can I bill the patient for CO-96?

"CO" group code means provider responsibility — generally no. However, if the patient has an advance waiver (ABN or equivalent) acknowledging the service may not be covered, you may be able to bill them. Check your contract.

Does Medicare have CO-96 denials?

Yes, but they're less common. Medicare's DME coverage is broad. Most Medicare CO-96 denials in DME are coding errors that make a covered item appear non-covered.