CO · Contractual ObligationCARC 24

Denial Code CO-24

Q: What does CO-24 mean?

CO-24 is a Contractual Obligation (CO) denial: "Charges are covered under a capitation agreement/managed care plan." The payer says this service is already covered under a capitation or managed-care arrangement — the practice is paid a fixed per-member amount for these services, so the individual claim isn't separately reimbursed.

Q: Is CO-24 the patient's responsibility or a provider write-off?

CO-24 carries the CO group code (Contractual Obligation): Provider/contractual responsibility — not billable to the patient while denied. A CO adjustment is the provider's responsibility, not the patient's: balance-billing the patient for a CO amount is a contract (and often compliance) violation. But CO does not automatically mean “write it off.” When the cause is fixable — missing information (CO-16), a modifier problem (CO-4), or NCCI bundling (CO-97) — you correct and resubmit, or appeal with documentation. You only truly write the amount off when it is a final contractual adjustment, such as the fee-schedule difference on CO-45.

Charges are covered under a capitation agreement/managed care plan.

Source: X12 Claim Adjustment Reason Codes (CARC) & Group Codes. Maintained by the D3rx Clinical Billing Team.

What CO-24 means

The payer says this service is already covered under a capitation or managed-care arrangement — the practice is paid a fixed per-member amount for these services, so the individual claim isn't separately reimbursed.

Why CO-24 happens

The patient is in a capitated managed-care plan and the service falls under the cap
The practice holds a capitation contract with this payer for these services
The service should have been billed to the capitated entity, not fee-for-service
Staff unaware of which services are capitated vs. fee-for-service under the contract

What to do when you get CO-24

1Check whether your practice has a capitation agreement covering this service for this payer
2If the service is within the cap, the denial is correct — no separate payment is due
3If the service is genuinely outside the cap's scope, appeal with the contract terms
4Confirm capitation payments are being received correctly for these members

Got this denial right now?

Ask D3 whether to appeal or correct CO-24

Ask D3 about CO-24 Ask D3 about CO-24

CO-24 can go either way depending on the claim. Ask D3 tells you whether to appeal, correct, or just confirm status — free.

CO group code: who absorbs the charge

Contractual Obligation — Provider/contractual responsibility — not billable to the patient while denied.

A CO adjustment is the provider's responsibility, not the patient's: balance-billing the patient for a CO amount is a contract (and often compliance) violation. But CO does not automatically mean “write it off.” When the cause is fixable — missing information (CO-16), a modifier problem (CO-4), or NCCI bundling (CO-97) — you correct and resubmit, or appeal with documentation. You only truly write the amount off when it is a final contractual adjustment, such as the fee-schedule difference on CO-45.

Appeal, correct, or write off CO-24?

CO-24 hinges on your contract: if the service is inside the capitated scope, there's nothing to appeal — it's paid through the per-member rate. If the service falls OUTSIDE the cap (a carve-out or excluded category), appeal with the contract language showing it's separately payable. Track capitated vs. fee-for-service members and codes so these don't recur.

Timing & deadlines

If appealing a service you believe is outside the cap, use the payer's window (commercial ~180 days from the remittance). There's no separate filing deadline for a correct capitation adjustment, but verify your capitation payments are arriving on schedule.

Example

A primary-care visit for a capitated HMO member is billed fee-for-service and returns CO-24. Because the visit is within the capitated scope, no separate payment is due; if instead it were a carved-out service, the contract would support an appeal.

Prevent CO-24 going forward

Maintain a list of capitated vs. fee-for-service codes per payer contract
Flag capitated members in your practice-management system
Verify capitation payments are received correctly and on time
Educate billing staff on which services are carved out of the cap

Code families most affected

Primary-care services under capitated contracts
Labs and ancillaries included in the capitation rate
Preventive services covered by the per-member payment

Related codes

Denial codes you'll often see alongside CO-24

CO-256 CO-22 CO-109

Payer notes

CO-24 reflects a capitation/managed-care payment arrangement, not a clinical denial. The decisive fact is your contract — whether the specific service is inside or outside the capitated scope.

Not sure how to work CO-24?

Ask D3 whether CO-24 should be appealed, corrected, or simply confirmed — free, backed by CMS, Medicare, and major-payer data.

Ask D3 about CO-24 Ask D3 about CO-24 All denial codes

Medical billing disclaimer

CARC/RARC definitions are the standardized X12 set; group-code semantics follow the X12 Claim Adjustment Group Code standard. Filing and appeal windows vary by payer — the standard anchors shown (Medicare redetermination 120 days from the remittance; Medicare timely filing 12 months from date of service; most commercial payers ~90-180 days) are general references, not a guarantee for any specific plan. Always confirm the rule in the payer's provider manual before acting. D3rx is not responsible for claim outcomes.