Claim Adjustment Reason Codes (CARC) CO 50 These are non-covered services because this is not deemed a ‘medical necessity’ by the payer. Note: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.
In addition to Claim Adjustment Reason Code you may receive Remittance Advice Remark Codes (RARC) N115 This decision was based on a Local Coverage Determination (LCD). An LCD provides a guide to assist in determining whether a particular item or service is covered. A copy of this policy is available at www.cms.gov/mcd, or if you do not have web access, you may contact the contractor to request a copy of the LCD.
Reason for this denial:
The denial is based on the Medical necessity i.e. the diagnosis code may be insufficient to support medical necessity as per the NCD / LCD guidelines. According to Section 522 of the Benefits Improvement and Protection Act (BIPA) an LCD is a decision by a fiscal intermediary (FI) or carrier whether to cover a particular service on an intermediary-wide or carrier-wide basis in accordance with Section 1862(a)(1)(A) of the Social Security Act (e.g., a determination as to whether the service or item is reasonable and necessary).
Medical policies are defined to permit reimbursement only for services that are “reasonable and necessary.”
Tips to aviod this denial:
Review NCD / LCD guidelines (http://www.cms.gov/medicare-coverage-database/overview-and-quick-search.aspx) before submitting a diagnosis code. Medicare contractors develop LCDs when there is no NCD or when there is a need to further define an NCD.
Compare the patient records and the NCD / LCD list for appropriate diagnosis
If a payable diagnosis is indicated in the patient’s encounter/service notes or record, correct the diagnosis and resubmit the claim.
If patient records is not documented with the required diagnosis you may neither resubmit the claim nor bill patient. Hence it would be a ‘Provider write off’.
Make sure to check the Coding Guidelines provided at the end of LCD under General Information.
Do not resubmit an entire claim when partial payment is made; correct and resubmit denied lines only.
Please note: All claims are subject to medical review to ensure adherence to this concept. Obtaining current medical policy and maintaining the updated diagnosis coding books are crucial to proper documentation.
Commercial insurances may not follow Medicare’s NCD / LCD guidelines but major Commercial insurances has developed their own medical coverage guidelines.
If a reported diagnosis code is not listed in their guidelines then the claim would be denied. If a payable diagnosis is not documented in the patient’s record then you may not resubmit the claim. If you feel the reported diagnosis is correct you may appeal the claim with necessary Medical records.
If a correct diagnosis code is reported with the CPT code as per their medical coverage guidelines and still you receive the denial as Non-covered services, then you may need to check with the insurance for patient’s coverage information. The CPT or diagnosis code may not be covered as per the patient plan, in such cases you may directly bill patient.