Why it matters in orthopedics
Orthopedic surgery generates many bundling questions. Arthroscopy codes overlap, injections and visits share a day, and major procedures such as total knee replacement (27447) and knee arthroscopy with meniscectomy (29880 or 29881) carry 90-day global periods in Medicare’s fee schedule. Each overlap can produce CO-97 when the claim doesn’t show why a service was separate. Our guide to common orthopedic claim denials shows how CO-97 fits with other denial types.
How it works
Payers use CARC 97 when another service or procedure they have already processed is considered to cover this one (X12 wording last modified July 1, 2017). Related codes include CARC 236, for procedure or modifier combinations that NCCI or a state workers’ comp rule treats as incompatible on the same day, and CARC 234, for a procedure the payer doesn’t pay on its own.
Remark codes add the reason: M15 (separately billed parts of one procedure were bundled), M144 (the surgery’s payment already covers care before and after it), N19 (an incidental part of the main procedure) and N20 (can’t be paid alongside another service that day). Noridian’s JF Part B list pairs CO-97 with M15 for postoperative care and bundled services.
NCCI procedure-to-procedure edits carry a modifier indicator: 0 means no modifier can bypass the edit, and 1 means an NCCI-associated modifier can bypass it when the clinical circumstances justify it.
The global surgical package covers related care for 92 days after a major procedure: the day before surgery, the day of surgery and 90 days after. Exceptions need modifiers 24, 25, 57, 58, 78 or 79 and supporting notes.
Group code CO assigns the amount to the provider. Medicare lets providers bill beneficiaries only for adjustments under group code PR.
Orthopedic example
A surgeon performs a medial meniscectomy (29881, knee arthroscopy with meniscectomy in one compartment) and a chondroplasty in the same compartment, and the practice bills 29881 with 29877 (arthroscopic knee chondroplasty). Medicare’s 2026 NCCI Policy Manual says 29877 shouldn’t be reported with other knee arthroscopy codes, because 29880 and 29881 already include chondroplasty. The 29877 line can return CO-97 (some payers use CO-236 for NCCI pairs). Alongside a meniscectomy code, G0289 applies only for loose- or foreign-body removal in a different compartment of the same knee.
Common denial triggers
Arthroscopic procedures in the same joint billed separately when one code includes the other.
Postoperative visits for the same problem billed during a 90-day global period without modifier 24 for an unrelated problem.
A same-day visit billed with a minor procedure without a significant, separately identifiable service and modifier 25.
Modifier 59 or an X modifier used when the documentation doesn’t show a separate site, session or procedure.
How to prevent or fix
Run NCCI and global-period checks before submission, and confirm the modifier indicator before relying on modifier 59 or an X modifier.
Tie every bypass modifier to documentation. The NCCI manual bars adding a modifier solely to get around an edit.
If the bundling is correct, adjust the charge and fix the charge-capture rule that produced it.
If the service was distinct and the modifier was missing, correct the claim. For a processed Medicare claim, that is a reopening for a clerical error.
If the modifier was billed and the record supports a separate service, appeal with the operative or visit note. Our modifier 25 injection-day guide covers the most common same-day scenario.
Frequently asked questions
How is CO-97 different from CO-236?
Both mean a service wasn’t paid separately because of another service. X12 ties CARC 236 specifically to procedure or modifier combinations that the National Correct Coding Initiative or state workers’ compensation rules treat as incompatible on the same day. CARC 97 is broader: the payer considers the service already paid within another adjudicated service, which also covers global surgery bundling. Read the remark code to see which rule applied.
Can modifier 59 fix a CO-97 denial?
Only when the clinical facts support it. The NCCI Policy Manual allows modifier 59 or an X modifier to bypass an edit when the procedures were performed at a different session, site or procedure, and only if the edit’s modifier indicator is 1. A modifier can’t be added solely to get paid. If the documentation shows a separate service, correct the claim; if not, the bundling stands.
Does a CO-97 adjustment mean the patient owes the amount?
No. Group code CO assigns the balance to the provider, and Medicare lets providers bill beneficiaries only for amounts assigned to group code PR. A bundled service is considered paid within the related service, so there is no separate patient balance. For commercial plans, your participation agreement and state law govern balance billing, but a CO adjustment signals the provider’s responsibility.
Guides that cover this term
The Most Common Orthopedic Claim Denials in 2026, and How to Prevent Them
Ten orthopedic denial types, the CARCs behind them, their root causes and how to prevent them, plus when to appeal or correct and resubmit.
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Can You Bill an E/M With Modifier 25 on an Orthopedic Injection Day?
Medicare rules, payer policies and a scenario table for billing a same-day E/M with modifier 25 alongside knee, shoulder and hip injections.
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Related terms
Sources
Claim Adjustment Reason Codes — X12, accessed October 14, 2026
Remittance Advice Remark Codes — X12, accessed October 14, 2026
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
Remittance Advice Resources and FAQs (ICN 905367) — CMS Medicare Learning Network, accessed October 14, 2026
This entry 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.