CO-213 denial code
Non-compliance with physician self-referral prohibition
How to fix it
This requires compliance review rather than a billing correction. Do not simply resubmit.
How to prevent it
Referral relationships with financial interests require compliance review before billing, not after.
In practice
A physician group refers imaging to an entity in which one of its partners holds a financial interest. The payer identifies a self-referral concern and returns CO-213.
This is a compliance determination, not a claims error, and treating it as one is the mistake to avoid. Resubmitting the claim does not address what the payer has raised and may compound it.
The right response is compliance review of the referral relationship — whether an exception applies, whether the arrangement is properly structured, and whether other claims share the same exposure.
What sits behind it
The physician self-referral law prohibits referring designated health services to entities with which the physician or an immediate family member has a financial relationship, unless a specific exception applies. It is a strict liability statute, which means intent is not a defence.
Numerous exceptions exist and are heavily used — in-office ancillary services, bona fide employment, personal service arrangements and others — but each carries detailed structural requirements, and an arrangement that nearly meets an exception meets none.
Because the penalties are substantial and can extend beyond the individual claim, this warrants counsel rather than a billing decision. A single denial on this basis may indicate an arrangement affecting a much larger body of claims.
Related codes
Terms used here — HIPAA · Credentialing · Denial
How we handle it — Revenue Cycle Management · Provider Credentialing · Practice Analytics
Primary sources
The rules behind CO-213, at the bodies that publish them.
- PECOS Medicare enrollment (opens in a new tab)
Centers for Medicare & Medicaid Services — Where Medicare provider enrollment is filed and maintained. Revalidation deadlines missed here stop payment outright.
- NPI Registry (NPPES) (opens in a new tab)
Centers for Medicare & Medicaid Services — Public lookup and management for National Provider Identifiers. A stale NPPES record is a quietly common cause of enrollment and claim rejections.
- 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.
Looking for a different code? Search all 190 CARC and RARC codes
Questions about CO-213
No. The payer has raised a compliance question rather than identified a claim defect, and resubmitting neither answers it nor helps. The appropriate response is a review of the referral relationship and the exception relied upon, with counsel involved.
A law barring physicians from referring designated health services to entities with which they or an immediate family member hold a financial relationship, unless a specific exception applies. It imposes strict liability, so intent does not provide a defence.
Many, including in-office ancillary services, bona fide employment and personal service arrangements. Each carries detailed structural requirements, and an arrangement that nearly satisfies an exception satisfies none, which is why the review has to be careful rather than intuitive.
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