What to Do When Your Claim Is Denied With Code CO-96 (Non-Covered Charges)
Understanding Why Insurers Use CO-96 — and How to Appeal It
A denial code CO-96 on your Explanation of Benefits (EOB) can be confusing, frustrating, and financially stressful. “Non-covered charges” makes it sound like your plan simply doesn’t pay for that service — but that’s not always true.
In fact:
Many CO-96 denials are wrong and can be reversed with the right documentation and appeal.
CO-96 is often triggered automatically by the insurer due to:
Coding errors
Missing modifiers
Incorrect claim submission
Wrong place-of-service code
Misapplied plan rules
Preauthorization issues
Provider’s network status confusion
This article explains:
What CO-96 really means
When it’s correct
When it’s wrong
How to interpret your denial letter
How to appeal
When to request a corrected claim vs. filing an appeal
What evidence you need
How to get your charges covered
Let’s walk through it step-by-step.
1. What Does CO-96 Mean?
CO-96 = The insurer denied the claim because it views the service as “non-covered.”
In other words, they are saying:
Your plan does not include this service, OR
The insurer believes the wrong code was used that makes it appear non-covered, OR
The claim did not meet your plan’s requirements
This code frequently appears alongside remark codes (M-codes or N-codes), which give more detail. For example:
N130: Consult plan documents for coverage
M50: Not medically necessary
N390: Patient liable — excluded service
CO-151: Payment adjusted because claim was submitted after timely filing
Understanding these remark codes is essential to fixing the denial.
2. Most Common Reasons for CO-96 Denials
CO-96 is broad — here are the actual reasons insurers deny under this code.
Reason 1: Service Truly Not Covered by the Plan
Some policies exclude:
Cosmetic procedures
Experimental treatments
Infertility treatments
Certain therapy types
Weight-loss medications
Certain durable medical equipment
If the item is clearly excluded under your plan, insurers will use CO-96.
Reason 2: Missing or Incorrect Coding (Most Common)
This is the biggest driver of preventable CO-96 denials.
Examples:
CPT code does not match diagnosis
Wrong place-of-service code (e.g., billed as inpatient instead of outpatient)
Missing modifier
Misused HCPCS code
Preventive service coded as diagnostic
Telehealth billing errors
The insurer flags the mismatched code as “non-covered.”
Reason 3: The Claim Was Not Preauthorized
Even if the service is normally covered, lack of preauthorization will trigger CO-96 or CO-197.
Reason 4: Out-of-Network Rules Misapplied
Sometimes the insurer treats a covered service as non-covered simply because:
The provider used the wrong NPI
The provider billed under the wrong tax ID
The insurer’s system didn’t recognize the provider’s network status
Reason 5: Preventive vs. Diagnostic Confusion
Example:
You scheduled a “preventive colonoscopy”
A diagnosis code got added
Insurer says it’s no longer preventive
CO-96 appears
Insurers often get this wrong.
Reason 6: Member Coverage Terminated
If coverage ended before the service date, the system denies automatically.
Reason 7: Insurer Error
Yes — insurers frequently mislabel a covered service as non-covered due to:
Internal system errors
Incorrect plan interpretation
Failing to apply ACA-required preventive coverage
Using outdated medical policies
These can be appealed — and often overturned.
3. Your First Step: Read the Denial Letter — Not Just the EOB
Your EOB only tells you the code.
Your denial letter tells you:
The exact reason for CO-96
The plan rule they relied on
Whether the service is truly excluded
Your appeal rights and deadlines
The address for appeals
What documents they used to make the decision
Look for phrases like:
“This service is excluded under your plan.”
“Billed code not covered.”
“Incorrect billing.”
“Preventive services limited to one per year.”
“Provider not eligible.”
This tells you whether you need:
A corrected claim, or
A formal appeal
(A corrected claim is faster — I’ll explain below.)
4. Should You Submit a Corrected Claim or an Appeal?
This is the #1 mistake patients make.
✔ If the denial is due to a billing/coding issue → request a corrected claim
Examples:
Wrong CPT code
Missing modifier
Incorrect diagnosis
Wrong place-of-service
Provider billed under the wrong NPI
This is NOT a patient appeal issue.
The provider must fix and resubmit.
✔ If the denial is truly based on coverage terms → file an appeal
Examples:
Service mislabeled “non-covered”
Misapplied exclusion
Preventive service incorrectly denied
Insurer misread the policy
ACA preventive care was not applied
Levels of care dispute (e.g., inpatient vs. observation)
This is a patient appeal issue.
5. How to Appeal a CO-96 Denial (Step-by-Step)
Below is the exact format insurers expect.
1. Open by Identifying the Claim
Include:
Patient name
Member ID
Claim number
Date of service
Provider name
Denial code (CO-96)
2. State Why the CO-96 Denial Is Incorrect
Example:
“This service is covered under my plan and was incorrectly denied as a non-covered charge.”
3. Quote the Plan Language
Request your Summary Plan Description or Evidence of Coverage and quote the section showing coverage.
Then write:
“As shown above, this service is covered and the CO-96 denial conflicts with the plan provisions.”
4. Explain the Medical or Billing Context
Examples:
“The procedure was preventive and required by ACA rules.”
“Coding was correct and supports coverage.”
“Diagnosis clearly supports the CPT billed.”
“Insurer misapplied the exclusion.”
5. Provide Supporting Evidence
Attach:
Policy pages showing coverage
Provider notes
Medical records
Proof of medical necessity
Referral notes
Provider statement
Preventive care guidelines (USPSTF A/B recommendations)
6. Make Your Legal Request
End strong:
“Please conduct a full, fair, and thorough review under all applicable federal and state laws, including the ACA, ERISA, and mandated preventive care requirements.”
6. Your Appeal Deadlines
These vary based on your plan type:
ERISA Employer Plans
You have 60-180 days to appeal
Insurer must respond in 30–60 days
You have the right to request your entire claim file
Individual / Marketplace Plans
Typically 60–120 days
External review available
Medicare / Medicaid
Different levels of appeal
Strict timelines
7. When to Request an External Review
If the insurer maintains that the service is excluded but:
It is preventive under ACA
It is medically necessary
The denial misquotes plan terms
They rely on incorrect coding
You can request an Independent Review Organization (IRO) review.
In many states, IRO decisions are binding on the insurer.
8. The Fastest Way to Appeal a CO-96 Denial
If the denial is not a coding issue, the easiest way to file a strong appeal is using an attorney-drafted template.
Your Non-Covered Charges Appeal Template should include:
Policy-based arguments
Medical evidence explanations
ACA criteria (if applicable)
ERISA rights (if applicable)
Instructions for submitting
Denied for CO-96? Use the Attorney-Drafted Appeal Letter That Fixes Non-Covered Charge Denials.
A CO-96 denial can be appealed — especially when the insurer misapplies coverage rules or mislabels a covered service as “non-covered.” Instead of writing your appeal from scratch, use my Non-Covered Charges Appeal Letter Template, drafted specifically for CO-96 cases.
You’ll get:
✔ A complete attorney-written appeal
✔ Arguments that force insurers to reevaluate
✔ Evidence checklist insurers expect
✔ Step-by-step filing instructions
✔ Instant download
👉 Get the Non-Covered Charges Appeal Template
You CAN Win Your Appeal
A denial letter is not the final decision. Insurance companies overturn claims every day when people submit a strong appeal.
Whether you use:
➡ The Free Appeal Guide
or
➡ The $29 Professional Appeal Template
—you can absolutely take back control and fight your denied claim with confidence.
Download Your Free Appeal Guide
Get the step-by-step instructions, evidence checklist, and sample wording you need.
Download Free Guide
Need a Full Appeal Letter Template? ($29)
Get a professionally drafted, fill-in-the-blank appeal letter tailored for medical claim denials.
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