CO-116 denial code
The advance indemnification notice did not comply with requirements
How to fix it
Review the notice against requirements. A defective notice generally cannot be cured after the fact.
How to prevent it
Use current forms, complete every field, obtain the signature before the service, and retain the original.
The CO prefix marks this a contractual obligation. The balance is absorbed by the provider under the payer agreement and cannot be transferred to the patient.
In practice
A practice issues an advance beneficiary notice for a service likely to be denied, the patient signs, the service is delivered and denied as expected. The practice bills the patient and the claim returns CO-116 — the notice did not meet requirements.
The consequence is severe and immediate: a defective notice cannot transfer liability, so the balance becomes a write-off rather than a patient responsibility. The service was delivered and nobody pays for it.
The defects are almost always mechanical. An outdated form, a blank reason field, a missing cost estimate, a signature obtained after the service, or a generic statement that the service might not be covered rather than a specific one about why.
What sits behind it
The reason field is where most notices fail. A valid notice states specifically why the payer is expected to deny — naming the coverage policy, the frequency limit or the necessity criterion — rather than gesturing at the possibility of non-coverage. Generic language is treated as no notice at all.
Timing is the second common defect and cannot be cured. The signature has to precede delivery of the service, and a notice signed afterwards, however complete, does not transfer liability. Obtaining signatures at check-out rather than check-in makes every notice defective.
Routine or blanket notices given to every patient are affirmatively disfavoured and can invalidate the practice's use of them generally. The instrument is meant for cases where denial is genuinely expected, and issuing it indiscriminately undermines both its validity and the patient's ability to make a real decision.
Related codes
Terms used here — Patient Responsibility · Medical Necessity · Denial
How we handle it — Patient Collections · Eligibility Verification · Denial Management
Primary sources
The rules behind CO-116, at the bodies that publish them.
- Evaluation and Management services guide (opens in a new tab)
Centers for Medicare & Medicaid Services — How E/M level is determined under the current medical decision making and time rules. The reference for any dispute about whether documentation supports a level.
- Medicare Claims Processing Manual (opens in a new tab)
Centers for Medicare & Medicaid Services — The operative manual for how Medicare claims must be coded, submitted, adjusted and appealed. When a payer policy and a vendor's advice disagree, this settles it.
- Medicare claims appeals process (opens in a new tab)
Centers for Medicare & Medicaid Services — The five levels of appeal, what each requires and the deadline for each. Missing a level's deadline ends the appeal regardless of the claim's merits.
Looking for a different code? Search all 190 CARC and RARC codes
Questions about CO-116
No. The notice exists to let the patient decide before the service, so a correction made afterwards cannot serve that purpose. Whatever was wrong at signature stands, and the balance becomes a write-off rather than a patient responsibility.
The current official form, a specific reason the payer is expected to deny rather than a general possibility, an estimated cost, the patient's option selection, and a signature obtained before the service is delivered. Missing any one of these can invalidate it.
No, and doing so is counterproductive. Blanket notices are disfavoured and can undermine the validity of the practice's notices generally, because the instrument is meant for cases where denial is genuinely expected and a real choice is being offered.
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