As per USA Healthcare and RCM guide the CO 24 denial code description is
“Charges are covered under a capitation agreement/managed care plan.”
Means the provider had already paid through pre arranged contract as Capitation or managed care Agreement so no additional payment should be made.
What is Capitation Agreement in RCM Process?
A capitation agreement is a payment model in RCM process in which
- Insurance company paid to provider a fixed amount Per patient Per month Basis (PMPM) regardless of how many services received by the patient.
Example:
An insurance company pays a clinic:
- $50 per member per month
for 500 enrolled patients.
Because the provider is already prepaid, individual claims for covered services may be denied with CO-24.
Common Reasons for CO-24 Denial:
- Patient Is Enrolled in an HMO or Managed Care Plan
- Provider Is Already Paid Through Capitation
- Claim submitted to wrong payer
- Incorrect PCP assign
- Eligibility verification not done properly
How to Handle CO-24 Denial in RCM:
Step 1: Verify Patient Eligibility:
Check:
- active coverage,
- plan type (HMO/PPO),
- PCP assignment,
- capitation status,
- delegated group information.
Step 2: Review the Provider Contract:
Review provider contract and confirm denied service in include under capitation or should be paid seprately.
Step 3: Identify the Correct Payer
Identify the correct payer like medical group, primary insurance, claims administrator etc.
Step 4: Check Referrals and Authorization:
Many HMO plans require:
- PCP referral, prior authorization, specialist approval so need to check it properly.
Step 5: Correct and Rebill the Claim:
If the claim was submitted incorrectly: rebill the correct payer/entity, or submit corrected claim information.
Can we send Appeal on CO-24 Denial:
Yes, we can send an appeal of co24 denial if,
- The service is not part of the capitation agreement.
- The payer processed the claim incorrectly.
- The patient was not assigned to the provider/group on the DOS.
- The provider was out-of-network.
- The service qualifies for carve-out reimbursement.
At last we can say that CO 24 denial description provide the information about the agreement between Insurance and provider/hospital so need to check it first. Handling claim carefully is most important thing improve the collection of process.