The 7 Most Common Claim Denials and How to Appeal Each One

I sat in on a customer call a few months back. The billing director of a 40-provider orthopedic group was going through her denial worklist with me. In about twenty minutes, she wrote off $11,000 worth of claims. Most of them, she admitted, were technically appealable. She just did not have the time or the team to fight every one.

Her story is not unusual. I hear it from billing leaders almost every week, and it is almost always the same handful of codes, regardless of practice size or specialty. The money is on the EOB. It just gets written off because nobody on the team has a process for each code.

This piece is that process, seven codes, all from working with billing teams that consistently recover the highest percentage of their denials. The last section breaks down how to write an appeal letter that actually gets read. Let’s get started.

A note on denial management before the codes

One thing first. The codes do not matter much if your denial management is a mess.

The teams I see consistently winning on reversal rates do not treat each denial as a one-off problem. They treat denials as a system. A working one looks like this:

• Denials get worked within 48 hours of the remittance landing, not weeks later
• Every claim is tagged by denial type so patterns surface fast
• Each one has a named owner (coder, biller, or supervisor depending on the code)
• Time-in-queue is tracked from intake to resolution
• Insights from worked denials flow back to fix the front-end processes that caused them

Most teams miss this part. Most of denial management is not about fixing the last claim, it is about preventing the next one. Every denial tells you something about what is broken upstream: front desk, coding, eligibility, or auth. If you pay attention to that, denial volume drops month over month. If you do not, the same codes come back next week.

That is the framework. Now to the seven codes themselves, roughly in the order they tend to land on a worklist.

1. CO 16 denial code: missing or invalid information

CO 16 is the catch-all. Probably the most common code I see on any worklist, and the most frustrating because it covers so much ground.

The CO 16 denial code means something is missing or wrong on the claim, and the payer is not going to spell out what. They leave that part to you to figure out.

The usual suspects:

• A required modifier left off the procedure code
• Wrong patient demographic info (date of birth, member ID, gender)
• Referring provider NPI not included on a claim that needed one
• Invalid place of service code
• Prior auth number left off the claim when one was actually issued

The fastest way to crack a CO 16 is to read the remark codes attached to it. Those are the breadcrumbs, they almost always point at the missing piece. Pull up the claim, lay it next to the chart, find what the payer expects to see, and resubmit a corrected claim. Most CO 16s are a paperwork fix, not a legal battle. No formal appeal needed.

2. CO 97 denial code: the service is bundled

CO 97 is the bundling denial. The payer is telling you that one of the services you billed got rolled into the payment for another.

New billers see this and assume the claim was rejected. It was not. The bigger procedure got paid; the smaller one just got absorbed into it.

CO 97 is wrong a lot. Payers bundle services that should have been reportable on their own, usually because a modifier 25 or 59 was missing.

The play:

• Check the NCCI edits for the code pair
• Look at the documentation. Was there a clearly separate, identifiable service?
• If yes, resubmit with the correct modifier and the supporting note
• If the payer still denies, send the formal appeal with chart notes attached

A wound care clinic we work with hit a CO 97 last year on a claim that bundled a debridement with a dressing change billed on the same day. Two separate services on two different anatomical sites, all clearly documented in the op note. They sent in the note, a corrected claim with modifier 59, and a one-page appeal. Twenty-one days later, the reversal came back. That kind of turnaround is the rule when CO 97 is wrongly applied and the documentation is in the chart.

3. CO 96 denial code: non-covered charge

CO 96 looks like a brick wall. Service not covered, patient on the hook, move on. About half the time, that read is wrong.

The CO 96 denial code can mean a benefit limit was hit, a plan exclusion was triggered, or the payer decided the service was not medically necessary for the diagnosis on the claim. Each of those has a different fix. Some are appealable, some are not. The work is figuring out which is which before you spend two hours writing a letter for nothing.

Step one is to check the secondary. If the patient has another payer, you may not be appealing at all, you may just be rebilling.

When the appeal is the right move, pick your angle:

• The service was actually covered under the plan and the payer misread it
• A diagnosis on the claim that does not reflect medical necessity (recoding might fix it)
• An exception or rider on the patient’s policy that the payer did not load
• Clinical guidelines that support the service for this diagnosis

Always pull the actual plan documents before writing a single sentence. Practices waste real hours appealing services that were genuinely excluded under the contract. Better to spot the lost causes early and put your energy into the ones you can win.

4. CO 45 denial code: charges exceed the contracted rate

CO 45 is the imposter on this list. Technically, it is not a denial at all, it is a contractual adjustment, the gap between what you billed and what your contract says you agreed to accept.

Most billers see CO 45 and move on. That is usually the right call.

Usually.

CO 45 amounts are wrong more often than people think. The payer applies a contractual write-off based on the rate they think was agreed to, and that rate does not always match what is actually in your contract.

When to push back on a CO 45:

• The fee schedule the payer used does not match the one in your contract
• The procedure was paid at a lower rate than your most recent contract amendment
• Multiple contracts in play (Medicare Advantage versus commercial) and the wrong one was applied
• A new code was added to your contract recently and the payer system has not caught up

This one does not move through the formal appeals queue. It moves through the provider relations rep at the payer. Pull the fee schedule, line it up against the EOB, and show the discrepancy in writing. I have watched single practices recover six-figure underpayments doing exactly this over the course of a year.

5. CO 197 denial code: precertification or authorization absent

CO 197 is the auth denial. It shows up when the payer required precertification or prior authorization for the service and either did not get one, or got one that did not match what was actually performed.

The frustrating part is that the money is almost always recoverable, but only with the right paperwork in the right order. Three scenarios to know:

• Auth was obtained but never made it onto the claim: just refile with the auth number. No appeal needed.
• The procedure performed differed from what was authorized: file a retro-auth request with the payer. Most payers allow them within 30 to 90 days.
• No auth was obtained at all: this is the hardest path. You will need to argue medical necessity and explain why the auth was not feasible (emergency, urgent care, patient transfer, and so on).

That middle scenario, the retro-auth, is where most of the recoverable money sits. A lot of billers do not even know retro-auths exist. They see CO 197 and write the claim off. Do not do that. Call the payer, ask about the retro-auth window, and submit the clinical notes. Plenty of these come back approved.

If the retro-auth route fails, file a formal appeal. Lead with clinical justification. Show urgency. Explain what would have happened to the patient if the service had been delayed waiting for an auth.

6. CO 252 denial code: more information needed

CO 252 is the friendliest denial on this list. The payer wants more information before deciding whether to pay. It is not a no, it is a not yet. The usual requests:

• Operative reports
• Office visit notes
• Itemized bills (especially for hospital claims)
• Letters of medical necessity
• Imaging reports

This is the easiest denial to flip into a payment, but only if the team moves fast. Most payers give 30 to 45 days, and the clock starts the day the remittance is dated, not the day someone in your office finally opens it.

The CO 252 workflow that wins:

• Pull only the records the payer asked for. Do not send the entire chart.
• Include a cover letter that lists what is enclosed and references the claim number.
• Send it through the channel the payer specifies (fax, portal, certified mail). The wrong channel can mean it never gets attached to the claim.
• Follow up at 14 days if there is no movement on the claim.

A multi-specialty customer of ours used to average 19 days to respond to CO 252 requests. We redesigned their workflow last year and got the average down to 4 days within two months. Their reversal rate jumped almost 30 percent in two quarters. Speed matters here more than almost anywhere else in revenue cycle.

7. OA 23 denial code: prior payer adjustment

OA 23 is the odd one out. The OA stands for ‘other adjustment,’ and the OA 23 denial code is the current payer reflecting an adjustment that a prior payer already made.

You see it most on secondary and tertiary claims. The primary insurer paid something, applied a contractual write-off, and the secondary is processing whatever is left.

OA 23 is rarely wrong, but it is worth a sanity check on two things:

• The amount of the prior adjustment matches what was on the primary EOB
• The crossover happened correctly (some payers reject claims that came through electronic crossover with bad data)

If the numbers do not line up, send the primary EOB to the secondary payer with a corrected claim. Not technically an appeal, but the process is similar.

The only reason OA 23 made this list is that billers regularly confuse it with a denial and burn hours appealing it. Do not. Save your appeal energy for codes that actually have money to recover.

How to write an appeal letter that gets you paid

Knowing how to write an appeal letter that wins is just as important as reading the codes correctly.

The reviewer on the other end is looking at hundreds of appeals every week. They have less time per appeal than you spend writing one. A long, dense letter does not impress them, it just makes them tired. Your goal is to make their job easy.

The structure I see win consistently, drawn from thousands of appeals across customer accounts:

Header block

Patient name, member ID, date of service, claim number, denial code, total amount in question. A reviewer should know which claim this is in two seconds.

Paragraph one

What you are appealing. Why the original denial was wrong. Two sentences. No fluff.

Paragraph two

The evidence. Chart note, contract section, NCCI edit, policy bulletin. Whatever supports the case, cite it directly.

Paragraph three

The ask. Reprocess the claim. Pay at the contracted rate. Reverse the bundling. Tell the reviewer exactly what to do next.

Closing

Thank them. Contact info. List of attachments.

That is the whole letter. Keep it to one page, maybe two if the case is unusually complex. Anything longer works against you.

A few patterns that show up in nearly every appeal that gets reversed:

• Stay under one page. If the case cannot fit on one page, the case is probably weak.
• Attach evidence on every claim. Never make an argument without a document to back it up.
• Use the payer’s own language. If a medical policy exists for the service, reference the exact section.
• Stay polite and firm. Anger does not win appeals. Documentation does.
• Send through the right channel. Many appeals are denied because they went to the wrong department, not because the case was bad.

One last thing. Track every appeal: date sent, date received, outcome, payer, and code. Over time this becomes the most valuable data you have. You start to see which payers reverse on which arguments, which codes have the highest win rates, and which letter formats fall flat. That is the foundation of every smart denial strategy I have worked with.

What changes when you stop writing denials off

Those seven codes (CO 16, CO 97, CO 96, CO 45, CO 197, CO 252, and OA 23) account for the bulk of denials at almost every billing team I have worked with. Build a real workflow around them and you will recover money that most clinics leave on the table.

The process is the same across all of them. 

Read the code. 

Find what is behind it. 

Pull the right evidence. 

Respond fast. 

Track the outcome.

Do that consistently and the denial rate drops, the reversal rate climbs, and the team stops seeing denials as headaches.

A denial is not the end of a claim, it is the start of another conversation with the payer. Practices that figure that out are the ones that get paid.