CO 45 Denial Code

CO 45 Denial Code – Charges exceed the fee schedule/maximum allowable or contracted/legislated fee arrangement.

This CO 45 Denial code is denoted on the EOB/ERA from an insurance company, when the insurance plan contractually allowed amount is lesser than physician billed charges. So it’s typically reference to the difference between what the physician charged for the healthcare service rendered and what the insurance plan allowed as per the contract.

The difference between provider billed amount and insurance allowed amount should be written off or amount should be adjusted off, since the patient is not responsible or it cannot be billed to other insurance as per contractual obligations.

Let us learn some of the key terms to better understand the above denial code CO 45.

Billed Amount:

Billed Amount of the claim also called as Charge amount or Total amount. It is the total amount charged from the provider to an insurance company for the health care services rendered to the patient.

Provider Billed Amount = Insurance Allowed Amount + Write off

Fee Schedule:

It is the lists of allowed amount document that gives the cost for each procedure code based on the patient insurance plan.

Allowed Amount:

It’s the maximum reimbursement amount fixed by the insurance company for the procedure code and it’s based on the insurance fee schedule.

In other way we can say, a maximum approved amount or considered amount from an insurance company to the health care provider for the healthcare procedure performed.

Insurance Allowed Amount = Provider Billed Amount – Write off.

Insurance Allowed Amount = Insurance Paid amount to provider/patient + Patient responsibility (Copay/Coins/Deductible).

Write off:

It is the difference between provider billed amount and insurance allowed amount and it is denoted from the insurance company on the EOB/ERA with the CO 45 denial code.

Write off = Provider Billed Amount – Insurance Allowed Amount.

 

Denial Code CO 45 Examples:

Exaplantion of Benefits 1:

Billed Amount Allowed Amount Paid Amount Patient responsibility Write off Remarks
$200 $160 $140 $20 $40 CO 45

As per the EOB provider has billed the claim with $200 for the healthcare services rendered. Out of $200, Insurance allowed $160 as per the contract and paid $140 with $20 patient responsibility. In this example the write off amount is $40, which is denoted with CO 45 denial code.

While posting this claim in application, payment posting team will write of $40 as it’s denoted with CO 45 denial code and post the payment of $140. Balance $20 will be billed to patient/secondary insurance.

 

Explanation of Benefits 2:

Billed Amount Allowed Amount Paid Amount Patient responsibility Write off Remarks
$1000 $800 $760 $40 $200 CO 45

 

In the second example, as per the EOB physician charged amount is $1000, out of which insurance approved $800 and paid $760 with patient responsibility $40. In this case $200 should be written off, which is indicated with CO 45 denial code from insurance company.

While posting this EOB, payment posting will write off $200 and post the payment of $760. Balance $40 will be billed to patient or secondary insurance.

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