CO-45 — Contractual Adjustment / Fee Schedule Write-off
The amount billed was simply higher than the contracted or fee-schedule allowed amount; the difference is a required write-off under the provider's contract with the payer, not something the patient owes (unles…
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In plain language
The amount billed was simply higher than the contracted or fee-schedule allowed amount; the difference is a required write-off under the provider's contract with the payer, not something the patient owes (unless the specific contract/regulation says otherwise).
Start here
Confirm the allowed amount against the current, effective fee schedule for that payer/code.
Who resolves it
Billing (routine write-off) or Contracting (if CARC 147 applies)
Who prevents it
Contracting/Payer Relations — maintaining accurate, current fee schedules loaded into the practice-management or hospital billing system for every contracted payer.
How to resolve this denial, step by step
- 1
Confirm the allowed amount against the current, effective fee schedule for that payer/code.
- 2
If CARC 147 (rate not on file/expired) applies, route to Contracting to update the payer's records.
- 3
If the allowed amount matches the contract correctly, process the standard write-off.
- 4
Document the fee-schedule verification.
- 5
Escalate to Contracting if a pattern of incorrect allowed amounts suggests a systemic fee- schedule loading error.
Then choose the correct disposition
Write-off/contractual adjustment
the expected, routine outcome.
Payer follow-up/Contracting correction
when CARC 147 or a fee-schedule discrepancy is identified.
Formal appeal
rarely relevant to a correctly applied contractual adjustment.
Stop and escalate when
- CARC 147 (contract rate expired/not on file) appearing on multiple claims for the same payer; allowed amounts that do not match the provider's own copy of the current fee schedule; a sudden, unexplained drop in allowed amounts across a payer's claims.
What Needs to Be Corrected
- Claim correction: Not applicable for a routine, correctly calculated contractual write-off.
- Upstream correction: If CARC 147 indicates the payer does not have the current contracted rate on file, Contracting must resolve this directly with the payer — it is not a claim resubmission issue.
Do Not Do This
- Do not bill the patient for the CO-45 contractual write-off amount; this is a provider- absorbed adjustment under the contract, not a patient liability, unless a specific PR designation and contract/regulatory basis applies.
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