CO-167: the diagnosis is not covered

Claim adjustment reason code 167 says the diagnosis (or diagnoses) on the claim is not covered. With group code CO, the amount is the provider's responsibility and the patient can't be billed for it, unless a valid Advance Beneficiary Notice was signed before the service.

These three denials are often grouped together, but they point to different problems:

Medicare's coverage policies don't only list diagnoses that support a procedure. Some also list diagnoses that do not. Those refusal lists are easy to miss.

• The policy explicitly lists the diagnosis as not covered for the procedure.
• The service is excluded for that condition, for example when Medicare treats it as routine or screening rather than diagnostic.
• The diagnosis code can't be used as the main diagnosis, so the claim is read as having no covered diagnosis.

A diagnosis that is simply missing from a covered list is often a coding problem: a more specific, covered diagnosis may already be in the note. A diagnosis the policy explicitly refuses is different. Recoding won't help unless a different diagnosis is genuinely documented, and an appeal needs strong clinical evidence.

• Check your contractor's policy for both lists: the diagnoses that support the procedure and the ones that don't. Your state decides the contractor; see the contractor by state table.
• Make sure the main diagnosis is the reason for the service, coded as specifically as the note supports.
• Use an ABN when you expect a denial. If the patient wants a service Medicare is likely not to cover, an Advance Beneficiary Notice signed before the service, with the GA modifier on the claim, lets you bill the patient if Medicare denies it.

• Confirm which list the diagnosis is on. If it was excluded, decide whether a different diagnosis is actually documented.
• If it is, correct the claim through your contractor's reopening process.
• If it isn't, an appeal (redetermination, within 120 days) needs clinical evidence that the service was necessary despite the policy. Weigh the effort against the amount.
• If a signed ABN is on file, check that the GA modifier was on the claim. Without it, the patient can't be billed.

This guide is general information, not legal or billing advice. Always check the current policy for your contractor and your payer's own rules.