Short answer
Key takeaways
Kodiak Solutions data show payers initially denied 11.81% of claims in 2024, and clinical denials drove virtually all of the 2025 increase.
Read the group code first. CO leaves the balance with the provider; for Medicare, only amounts under PR can be billed to the patient.
Data errors such as CO-16 need a corrected claim. Medical-necessity and authorization denials need records and, usually, an appeal.
Most prevention happens before the claim: eligibility checks, authorizations matched to the case, criteria-based notes, and NCCI and global-period edits.
The worker has no cost-sharing to collect.
Noridian (JF) California uses the Medical Treatment Utilization Schedule (MTUS), New York its Medical Treatment Guidelines (MTGs), and Texas the Official Disability Guidelines (ODG) for non-network claims. Utilization review applies those guidelines to treatment requests.
Reports are part of the claim. Each state requires initial, progress and work-status reporting, and missing reports stall payment.
MMI, impairment ratings and independent exams shape the case.
A/R balance ÷ average daily gross charges (gross) or average daily net revenue (net)
Genzeon Corporation
Innovaccer Inc.Claims that pass edits with no manual intervention ÷ claims entering the claim scrubber
Oklahoma
Novitas (JH)
Texas | Novitas (JH)TDI Division of Workers’ Compensation (DWC) | Professional fee schedule | |
|---|---|---|---|
Virtix Health LLC | AAFP for the target; MGMA DataDive for the formula | Which orthopedic services are on the WISeR list?How do you calculate days in A/R, and what is a good number? | |
Scales with volume | Gross days in A/R: | Level the E/M on the separate work alone. The pre-injection assessment belongs to the injection, so it should not count toward medical decision making, and if you select the level by time, leave out the minutes spent on the procedure. | Authorization |
Shifted to the vendor | What drives it: | Key reports | |
There is no formal published benchmark. In a November 2024 MGMA article on managing revenue cycle vendors, a consultant noted that a 90% clean claims rate is generally considered industry best practice. Guests from a revenue cycle vendor on an April 2025 MGMA podcast put the ideal at around 95%, a figure widely repeated in vendor materials. | EHR integration is the key question | Billing deadline | |
BAA required, including subcontractors | Missing or invalid NPI, ordering provider, procedure code or primary-payer information | ||
Onboarding, enrollment updates, A/R transition | EHR integration, rule setup, workflow changes | Patient changed plans between scheduling and surgery | Percutaneous image-guided lumbar decompression (NCD 150.13) |
New York | |||
Coordination of benefits or liability | For knee arthroscopy, CMS’s checklist asks for documentation of less severe or early degenerative arthritis with symptoms beyond pain alone, such as locking, catching or popping, plus standing x-ray and MRI reports. NCD 150.9 already makes arthroscopic lavage alone, and debridement for pain-only presentations or severe (Outerbridge grade III or IV) osteoarthritis, nationally noncovered. | ||
Patient in the global period of an unrelated right knee arthroscopy has a new left shoulder problem evaluated and injected | Calculation | ||
Texas | What are the common workers’ comp denials in orthopedics, and how do you prevent them? | Decision |
How would the same-day E/M reduction work?
$1,520,000 net A/R ÷ $40,000 per day means a required precertification, authorization or notification wasn’t on file. CARC 15, the older authorization-number code, was deactivated effective May 1, 2018, per the X12 list; current authorization codes include 197, 198 (authorization exceeded) and 39 (denied when requested). Watch for mismatches: an approval for one CPT code when the operative note documents another, the wrong side, a changed site of service or an expired date range. In Original Medicare, the WISeR Model has required prior authorization, or prepayment medical review, for selected services including knee arthroscopy for knee osteoarthritis in Arizona, New Jersey, Ohio, Oklahoma, Texas and Washington since January 1, 2026.
38 daysWhen a payer bundles the E/M into the injection, the remittance often shows
Provisional affirmationMixed method (avoid)
$1,520,000 net A/R ÷ $100,000 per day
(authorization or precertification missing)billing an E/M on an orthopedic injection day
CARC 16
CO-16Provisional partial affirmation
Coverage problems appear as CO-27 (service after coverage ended) or CO-26 (service before coverage began). Surgery is scheduled in advance, so re-verify eligibility close to the date of service.
880 denied ÷ 11,000 claims remitted
Handle each service according to its own decision
DismissalPayer
Correct the problem and resubmit
Every decision carries a MAC-generated unique tracking number (UTN), valid for 120 calendar days from the decision. Report it on the claim whether the decision was affirmed or not, in loop 2300 REF (qualifier G1) of an 837P or the first 14 positions of item 23 on a paper CMS-1500. For ASC and hospital outpatient services, the UTN goes on the facility claim.
Potentially misvalued codes.
A claim billed after a non-affirmation is denied, with normal Medicare appeal rights. If the patient still wants the service, CMS says to deliver an
Can your surgeons earn a WISeR exemption, or gold card?
Timely filingExemptions are added quarterly, last at least a year and cover all WISeR services and sites of care. Participants reevaluate them with no more than 10 ADRs per year and give at least 60 days’ notice before removing a provider. On claims, report the exempt NPI as the rendering provider in the office or home, the referring or ordering provider on ASC claims, and the operating provider on hospital outpatient claims.
How should an orthopedic practice build a WISeR workflow?
Track 95 days in Texas, 120 days in New York and 12 months in California
For DME, confirm the written order, supporting notes, required modifiers and signed proof of delivery before billing.
covers the details.
Agree with each ASC and hospital on who submits the request, who receives the UTN and how it reaches the facility claim.
Clerical error on a processed Medicare claim | Transposed code, wrong modifier or wrong date of service | Request a reopening; CMS requires clerical errors to go through reopenings, not appeals |
Payer judgment you disagree with | CO-50, CO-11, CO-97, CO-197 | Appeal with records mapped to the payer’s criteria and request a peer-to-peer if offered |
No appeal right | Write off unless you can prove timely filing or an exception applies | |
Wrong payer billed |
For Original Medicare, file a redetermination within 120 days of receiving the initial determination. Medicare Advantage and commercial deadlines differ; the appeal guide lists them by level.
How Rette helps
Orthopedic claims combine several things that draw payer edits: costly procedures that need prior authorization, 90-day global surgical periods, frequent modifiers, injury-related coordination of benefits and durable medical equipment (DME). Each produces its own family of denial codes, and each has a known fix.
This guide maps ten orthopedic denial categories to their claim adjustment reason codes (CARCs), common root causes and prevention steps. It closes with a prevention checklist and a guide to deciding whether to appeal or correct and resubmit.
How often are claims denied in 2026?
The figures below come from different populations, mostly hospitals and multispecialty groups, so treat them as context rather than orthopedic benchmarks. Your own denial rate, tracked by payer and CARC, is the number to manage.
Kodiak Solutions (May 2025): payers initially denied 11.81% of claims in 2024, up 2.4% from 2023, across more than 2,100 hospitals and 300,000 physicians on its analytics platform. Authorization-related denials fell 7.7%, while medical-necessity denials rose 5%.
Kodiak Solutions (March 2026): denials for missing precertification or prior authorization and for medical necessity accounted for virtually all of the increase in denial rates from 2024 to 2025.
Experian Health (September 2025): 41% of 250 surveyed revenue-cycle professionals reported denial rates of 10% or higher. Top causes were missing or inaccurate data (50%), authorizations (35%) and registration errors (32%).
MGMA Stat: 60% of medical group leaders reported rising denial rates in a March 2024 poll, and 48% named denials and appeals their biggest revenue-cycle leak in January 2026.
KFF (January 2026): Medicare Advantage insurers fully or partially denied 7.7% of nearly 53 million prior authorization requests in 2024. Only 11.5% of denials were appealed, and 80.7% of appealed denials were overturned at least in part.
HHS OIG (April 2022): in its sample, 13% of Medicare Advantage prior authorization denials met Medicare coverage rules, and 18% of payment denials met Medicare coverage and plan billing rules.
Two lessons follow. Clinical denials, the ones your documentation decides, are growing. And appealed denials are frequently reversed when the record supports the service.
How do you read a denial code?
Each adjusted line on an electronic remittance (835) carries up to three codes, all published by X12:
Group code: who owns the balance. CO (contractual obligation) assigns it to the provider and PR (patient responsibility) to the patient; OA and PI cover other adjustments and payer-initiated reductions. Medicare lets providers bill beneficiaries only for amounts under PR.
CARC: the general reason, such as CO-50 for medical necessity.
RARC: the remittance advice remark code, which adds detail. N115, for example, says the decision rested on a local coverage determination (LCD).
Read all three before acting. CO-16 with MA130 means Medicare found the claim unprocessable and gives no appeal rights, so you correct it and submit a new claim.
What are the main orthopedic denial types?
Denial type | Typical CARC | Common orthopedic root cause | How to prevent |
|---|---|---|---|
Missing or invalid prior authorization | CO-197 (CARC 15 was retired in 2018) | Approval covers a different CPT code, side, site of service or date range than the surgery performed | Match each authorization to CPT code, laterality, facility, surgeon and dates; update it when the plan changes |
Medical necessity or diagnosis mismatch | CO-50, CO-11 | Notes don’t show the payer’s criteria, or the diagnosis or side doesn’t match the procedure | Document to the payer’s published criteria; code to full specificity and check laterality |
Bundling, NCCI and global period | CO-97 (also CO-236) | Chondroplasty billed with meniscectomy in the same knee; related visits billed inside a 90-day global | Run NCCI and global-period checks; use 24, 58, 78 or 79 only when the record supports them |
Modifier errors | CO-4 | Modifier 25 on the injection instead of the visit; 57 before a minor procedure; missing RT or LT | Validate modifier-to-code logic in the claim scrubber and tie each modifier to documentation |
Missing information | CO-16 with a RARC | Missing or invalid NPI, ordering provider, procedure code or primary-payer information | Front-end edits for required fields; fix the exact element the RARC names |
Eligibility or coverage ended | CO-27 (or CO-26) | Patient changed plans between scheduling and surgery | Re-verify eligibility shortly before the date of service |
Timely filing | CO-29 | Claims held for notes, authorization or secondary billing until the limit passed | Track each payer’s limit; Medicare allows one calendar year from the date of service |
Coordination of benefits or liability | CO-19, CO-20, CO-21, CO-22 | Work injury or auto accident, so workers’ comp, no-fault or liability coverage pays first | Ask about injury cause at intake and bill the primary carrier first |
DME documentation and delivery | CO-50 or CO-16 (varies) | Brace dispensed without a complete order, supporting notes, KX modifier or signed proof of delivery | Keep the order, medical-record support and proof of delivery on file for seven years |
Duplicate claim | OA-18 (CO-18 only where state workers’ comp rules require it) | Resubmitting a pending claim instead of checking status | Check claim status first; send changes as corrected claims or Medicare reopenings |
What drives authorization and medical-necessity denials?
CO-197 means a required precertification, authorization or notification wasn’t on file. CARC 15, the older authorization-number code, was deactivated effective May 1, 2018, per the X12 list; current authorization codes include 197, 198 (authorization exceeded) and 39 (denied when requested). Watch for mismatches: an approval for one CPT code when the operative note documents another, the wrong side, a changed site of service or an expired date range. In Original Medicare, the WISeR Model has required prior authorization, or prepayment medical review, for selected services including knee arthroscopy for knee osteoarthritis in Arizona, New Jersey, Ohio, Oklahoma, Texas and Washington since January 1, 2026.
CO-50 means the payer judged the service not medically necessary. Original Medicare decisions can rest on a national coverage determination (NCD) or an LCD. NCD 150.9, for example, excludes arthroscopic debridement of an osteoarthritic knee when the patient presents with knee pain only.
For total joints, the policies we reviewed from Aetna, Cigna (EviCore) and Carelon generally require imaging-confirmed advanced arthritis, functional limitation and roughly 12 weeks of failed nonoperative care. Our knee and hip replacement appeal guide covers those criteria and appeal deadlines.
CO-11 means the diagnosis doesn’t fit the procedure. An orthopedic example is a right-knee injection (20610 with RT) billed with M17.12, the code for left-knee osteoarthritis. Code to full specificity and confirm that laterality agrees across diagnosis, procedure and modifiers.
Why do bundling, global-period and modifier denials happen?
CO-97 means the payer considers the service already paid as part of another service. Many come from NCCI procedure-to-procedure edits. Medicare’s 2026 NCCI Policy Manual says arthroscopic knee chondroplasty (29877) shouldn’t be reported with other knee arthroscopy codes, and G0289 may accompany a meniscectomy (29880 or 29881) only for loose- or foreign-body removal in a different compartment of the same knee.
Global periods cause many others. For a major procedure such as total knee replacement (27447), Medicare’s global package spans 92 days: the day before surgery, the day of surgery and 90 days after. Related visits in that window are included. Exceptions need the right modifier and documentation: 24 for an unrelated visit, 25 for a significant, separately identifiable visit on a procedure day, 57 for the decision for major surgery, 58 for a staged or related procedure, 78 for an unplanned return to the operating room and 79 for an unrelated procedure.
CO-4 means the procedure code and modifier don’t agree. Orthopedic examples include modifier 25 on the injection instead of the visit, modifier 57 on a visit before a minor procedure (CMS pays the decision for surgery separately only for major surgery) and modifier 59 on an E/M code, which the NCCI manual says not to do. Modifiers report what happened; the NCCI manual bars adding one solely to bypass an edit.
Which data and administrative errors cause denials?
CO-16 means the claim lacks information or has a billing error. X12 requires at least one RARC with it, and that RARC names the problem: M51 (procedure code), N290 (rendering provider NPI), N264 or N265 (ordering provider) or MA04 (primary payer information). Fix the data rather than appealing.
Coverage problems appear as CO-27 (service after coverage ended) or CO-26 (service before coverage began). Surgery is scheduled in advance, so re-verify eligibility close to the date of service.
Timely filing denials (CO-29) are hard to reverse. Noridian’s JF Part B list pairs CO-29 with N211, which tells you the decision can’t be appealed. Medicare requires claims within one calendar year after the date of service, with narrow exceptions. Commercial, Medicaid and workers’ comp limits come from contracts and state rules, so track each one.
Duplicates carry CARC 18. X12 limits it to group code OA except where state workers’ compensation rules require CO, so most remits show OA-18. If Medicare wrongly flags a claim as a duplicate, CMS treats that as a clerical error fixed through a reopening.
How do workers’ comp, auto and DME claims get denied?
When an injury happened at work or in an accident, another payer usually pays first. CARC 19 points to workers’ compensation, 20 to a liability carrier, 21 to a no-fault carrier and 22 to another payer under coordination of benefits. Under Medicare Secondary Payer rules, workers’ comp, no-fault and liability coverage pay first for related care, and Medicare generally denies claims when its records show another primary payer. Capture the injury cause, date and claim number at intake. Our workers’ compensation billing guide covers authorizations, fee schedules and common denials.
Practices that dispense braces as DMEPOS suppliers need a standard written order, medical-record support, any policy-required modifier such as KX, and proof of delivery. CMS requires suppliers to keep proof of delivery for seven years from the date of service, and the delivery date is generally the date of service. Noridian’s DME MAC lists a missing order and a missing KX modifier among common causes of reason code 50 on DME claims.
What belongs on a denial-prevention checklist?
Verify eligibility and benefits at scheduling and again shortly before the date of service.
Ask every injury patient whether the problem is work-related or from an accident, and record the primary carrier and claim number.
Check authorization rules for every planned CPT code, including procedures the surgeon may add, and record the reference number.
Match each authorization to CPT code, side, site of service, surgeon and date range, and update it when the plan changes.
Document to the payer’s published criteria before scheduling elective joint replacement or arthroscopy.
Code diagnoses to full specificity and confirm laterality matches across diagnoses, procedures and modifiers.
Run NCCI procedure-to-procedure, medically unlikely edit (MUE) and global-period checks, and tie every modifier to documentation.
Scrub required fields: NPIs, ordering and referring providers, primary-payer information and patient identifiers.
For DME, confirm the written order, supporting notes, required modifiers and signed proof of delivery before billing.
Track filing limits by payer, check claim status before resubmitting, and review denials weekly by CARC, RARC, payer, CPT code and provider.
Should you appeal or correct and resubmit?
Ask one question: did the payer act on missing or wrong data, or did it make a judgment you can rebut with records? CMS draws the same line for Medicare: rejected claims may be corrected and resubmitted, while denials are payment determinations subject to appeal.
Situation | What you see | What to do |
|---|---|---|
Unprocessable claim or missing data | CO-16 with MA130 or N704 | Correct the data and submit a new claim within the filing limit |
Clerical error on a processed Medicare claim | Transposed code, wrong modifier or wrong date of service | Request a reopening; CMS requires clerical errors to go through reopenings, not appeals |
Payer judgment you disagree with | CO-50, CO-11, CO-97, CO-197 | Appeal with records mapped to the payer’s criteria and request a peer-to-peer if offered |
No appeal right | CO-29 with N211 | Write off unless you can prove timely filing or an exception applies |
Wrong payer billed | CO-19 to CO-22, CO-109 | Bill the primary payer, then send its payment details to the secondary |
For Original Medicare, file a redetermination within 120 days of receiving the initial determination. Medicare Advantage and commercial deadlines differ; the appeal guide lists them by level.
How Rette helps
Rette’s agents read the operative and clinical notes in the EHR your practice already uses, suggest codes and check claims against NCCI, NCD and LCD rules before submission. Prior authorization, denials, appeals and workers’ compensation work sit in one prioritized queue.
Frequently asked questions
Can you bill the patient when Medicare denies a service with CO-50?
Not when the group code is CO. CMS lets providers bill Medicare beneficiaries only for amounts assigned to group code PR. If you expected a medical-necessity denial and gave the patient a valid Advance Beneficiary Notice before the service, report modifier GA so Medicare can assign liability to the patient. Without a valid notice, the practice is generally liable. Medicare Advantage plans and their contracted providers don’t use the ABN, so ask the plan for a pre-service decision instead.
Why does a duplicate claim show OA-18 instead of CO-18?
X12 limits CARC 18, the exact-duplicate code, to group code OA except where state workers’ compensation regulations require CO. That is why most practices see OA-18 on their remittances. Check claim status before resubmitting anything. If Medicare flagged a claim as a duplicate in error, CMS treats that as a clerical error, so you request a reopening instead of filing an appeal.
What happened to CARC 15 for missing authorization numbers?
CARC 15, which covered a missing, invalid or mismatched authorization number, was deactivated effective May 1, 2018, according to the X12 code list, so it appears only on older remittances. Current authorization denials use codes such as 197 (authorization absent), 198 (authorization exceeded) and 39 (denied when requested). Remark codes add detail, such as M62 for a missing or invalid authorization code and N54 when the claim doesn’t match the authorized services.
How long do you have to appeal a Medicare denial?
For Original Medicare, file a redetermination with your Medicare Administrative Contractor within 120 days of receiving the initial determination. CMS presumes you received the notice five days after its date, and the contractor generally decides within 60 days. Clerical errors such as a wrong modifier or transposed code go through a reopening instead of an appeal. Medicare Advantage plans run a separate process with a 65-day window from the notice date.
Sources
Claim Adjustment Reason Codes — X12, accessed October 14, 2026
Remittance Advice Remark Codes — X12, accessed October 14, 2026
Claim Adjustment Group Codes — X12, accessed October 14, 2026
Rate of initial denials of medical insurance claims continued to rise in 2024, Kodiak Solutions’ proprietary data show — Kodiak Solutions via Business Wire, May 21, 2025
Healthcare Provider Organizations Saw Net Revenue Losses From Final Denials and Bad Debt Grow by 25% in 2025, According to Kodiak Solutions’ Proprietary Data — Kodiak Solutions via Business Wire, March 31, 2026
Experian Health’s 3rd Annual State of Claims Survey Finds Denials Still on the Rise Amid Escalating Challenges — Experian Health, September 22, 2025
Strategic improvements in your RCM to reduce your practice’s claim denials — MGMA Stat, March 6, 2024
Detecting and fixing leaks across the revenue cycle — MGMA Stat, January 7, 2026
Medicare Advantage Insurers Made Nearly 53 Million Prior Authorization Determinations in 2024 — KFF, January 28, 2026
Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care (OEI-09-18-00260) — HHS Office of Inspector General, April 27, 2022
Remittance Advice Resources and FAQs (ICN 905367) — CMS Medicare Learning Network, accessed October 14, 2026
Wasteful and Inappropriate Service Reduction (WISeR) Model — CMS Innovation Center, last modified September 30, 2026
Medicare National Coverage Determinations Manual, Chapter 1, Part 2 (section 150.9) — CMS, NCD effective June 11, 2004
NCCI Policy Manual for Medicare Services, Chapter I: General Correct Coding Policies — CMS, revised January 1, 2026
NCCI Policy Manual for Medicare Services, Chapter IV: Surgery, Musculoskeletal System — CMS, revised January 1, 2026
Global Surgery (MLN907166) — CMS Medicare Learning Network, December 2025
RVU26D: PFS Relative Value Files, October 2026 release — CMS, updated August 26, 2026
Denial Code Resolution, JF Part B — Noridian Healthcare Solutions, last updated July 9, 2025
Reason Code 50, JD DME — Noridian Healthcare Solutions, last updated June 6, 2025
42 CFR 424.44, Time limits for filing claims — eCFR, current as of October 2026
Medicare Secondary Payer (MLN006903) — CMS Medicare Learning Network, July 2025
Medicare Program Integrity Manual, Chapter 4 (section 4.7.3.1, supplier proof of delivery) — CMS, section effective February 21, 2023
Medicare Program Integrity Manual, Chapter 5 (DMEPOS documentation) — CMS, revision issued March 19, 2026
Medicare Claims Processing Manual, Chapter 1 (section 70.2.3.2) — CMS, revision issued April 10, 2026
Medicare Claims Processing Manual, Chapter 34 (section 10.4, clerical error reopenings) — CMS, section effective September 30, 2016
Medicare Advance Written Notices of Non-coverage (MLN006266) — CMS Medicare Learning Network, May 2025
Medicare Parts A & B Appeals Process (MLN006562) — CMS Medicare Learning Network, September 2025
Parts C & D Enrollee Grievances, Organization/Coverage Determinations, and Appeals Guidance — CMS, effective July 6, 2026
Terms in this guide
This guide is educational and is not legal, coding-compliance or billing advice. Payer rules change often, so confirm requirements with the payer before you bill. CPT® is a registered trademark of the American Medical Association; code descriptions here are Rette’s plain-language summaries.
