Denials written off without appeal, which your

• Payment and global period

• The UTN is missing from the claim, or the service falls outside the 120-day window.

How to prevent or fix

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• KX is appended without documentation that supports medical necessity, which surfaces on medical review.

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Why it matters in orthopedics

Many commercial and Medicare Advantage plans require authorization for elective orthopedic surgery, advanced imaging or some injections, and Original Medicare added prior authorization or prepayment review in six states through the WISeR Model on January 1, 2026. Kodiak Solutions reported that denials for missing precertification or authorization and for medical necessity drove virtually all of the increase in denial rates from 2024 to 2025. Our guide to common orthopedic claim denials shows where CO-197 fits.

How it works

• Payers use CARC 197 when they have no record of a required precertification, authorization, notification or pre-treatment approval (X12 wording last modified May 1, 2018). Related codes are CARC 198 (authorization exceeded) and CARC 39 (services denied when authorization was requested). The X12 list shows CARC 15, the older code for a missing or invalid authorization number, deactivated effective May 1, 2018.

• Remark codes add detail: M62 (the authorization code is missing or invalid) and N54 (the claim doesn’t match what was authorized).

• Since January 1, 2026, the CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F) has required Medicare Advantage organizations, Medicaid and CHIP programs and plans, and QHP issuers on the federally facilitated exchanges to give a specific reason when they deny a prior authorization request. Most of those payers must also decide standard requests within 7 calendar days and expedited requests within 72 hours.

• Group code CO assigns the amount to the provider. Medicare lets providers bill beneficiaries only for adjustments under group code PR.

Orthopedic example

A commercial plan authorizes a medial meniscectomy (29881, knee arthroscopy with meniscectomy in one compartment). During surgery, the surgeon finds and treats tears in both the medial and lateral menisci, documents the finding and bills 29880, the code for both compartments. The authorization doesn’t match the code billed, so the 29880 line returns CO-197 with N54. The practice checks whether the plan allows an authorization update after surgery; if not, it appeals with the operative note.

Common denial triggers

• An authorization for a different CPT code, side or site of service than the one billed.

• An expired authorization window, often after a rescheduled surgery.

• Procedures added during surgery that the original request didn’t include.

• An authorization number missing from the claim or keyed incorrectly.

• In WISeR states, a selected service, such as knee arthroscopy for knee osteoarthritis, billed without an affirmed request, which sends the claim to prepayment medical review.

How to prevent or fix

• Keep a payer and CPT authorization matrix, and check it for every planned code, including procedures the surgeon may reasonably add.

• Match each approval to CPT code, laterality, facility, rendering surgeon and dates, and re-verify when the schedule or plan changes.

• Put the authorization number on the claim exactly as issued.

• If the authorization existed, send the reference number and portal record and ask the payer to reprocess; appeal if it won’t.

• If no authorization was obtained, check the payer’s retroactive authorization policy, then appeal on medical necessity with the records. A medical-necessity denial shows as CO-50 instead. Our WISeR guide covers the Original Medicare workflow.