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Last Modified: 9/27/2022 Location: FL, PR, USVI Business: Part B

Claim rejected as unprocessable with reason code (CARC) CO4 FAQ

Q: We received a rejected claim with claim adjustment reason code (CARC) CO4. What steps can we take to avoid this rejection code?
The procedure code is inconsistent with the modifier used or a required modifier is missing.
A: This CARC code is received when a claim is submitted and the procedure code(s) are billed with the wrong modifier(s), or the required modifier(s) are missing. A clear understanding of Medicare’s rules and regulations is necessary to assign the appropriate modifier(s) correctly.
What is a procedure code modifier?
A modifier is a two-position alpha or numeric code that is added to the end of a CPT or HCPCS code to provide additional information or to clarify the service(s) being billed.
Important Review Facts
Before submitting your claim, ensure you use the most current year's CPT codes and modifiers.
Know the proper use of the CPT modifiers that exist and the appropriate use for the specific condition or situation.
Check the claim to verify if an applicable modifier(s) is warranted and has been applied to the procedure code billed.
Providers can use the Modifier lookup tool which provides information for most procedure code modifiers used by Medicare.
If a modifier has been entered but the Medicare contractor rejects the claim, you should verify that the correct modifier(s) was/were used.
For example:
Modifier 26 may be used to indicate that the professional component is reported separate from the technical component (TC modifier) for certain diagnostic test and radiology services. Codes that do not have both a technical and professional component (such as, laboratory codes 85025, 80053, 80048, 83735, 84100, 85610, 82803, 82615 and 85027) should not be billed with modifier 26.
Correct billing: Modifier 26 (professional service) may be used when billing procedure code G0202 (digital screening mammography). The listed diagnostic procedure has both a professional and technical component.
Incorrect billing: Modifier 26 (professional service) is not permitted when billing procedure code 80048 (basic metabolic panel). The listed laboratory code does not have a professional and technical component.
Submit separate claims for services in different years of service. A procedure code or modifier valid in one year may not be valid in the other and will cause the entire claim to reject or deny.
To avoid delays in payments, providers must resubmit a corrected claim. Claims that are rejected cannot be appealed, for more information, review "What you should do with claims returned as unprocessable."
Refer to the Claim submission guidelines on First Coast’s Medicare provider website for additional useful information.
The CMS guidelines for completion of form CMS-1500 can be found in the IOM 100-04, Medicare Claims Processing Manual Chapter 26 external pdf file
Source: First Coast Education Action Team
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