Monthly Medicaid patient liability amount (Updated for 2026)

Common Causes for CO-142

Denials with code CO-142 typically happen for the following specific reasons:

• The patient has a monthly Medicaid spend-down or share-of-cost obligation that must be met before Medicaid benefits activate for the month.
• The provider submitted the claim to Medicaid without verifying or accounting for the patient's active monthly liability obligation.
• The state Medicaid agency incorrectly calculated or applied the patient's monthly liability to this specific claim instead of other services rendered earlier in the month.
• A retroactive change in the patient's income or eligibility status adjusted their monthly liability amount, which was not updated in the provider's billing system.

How to Prevent CO-142 Denials

To avoid receiving this denial in the future, implement these specific checks:

• Verify the patient's exact monthly Medicaid liability and eligibility status through the state's Medicaid portal prior to rendering services each month.
• Implement a collection process to secure the designated patient liability or share of cost directly from the patient at the beginning of the billing cycle.
• Ensure the billing system is updated with accurate patient liability details to segment the patient-pay portion from the Medicaid-billed portion.
• Maintain communication with the patient's Medicaid caseworker to track when the monthly spend-down threshold has been met.

Appeal Letter Template for CO-142

If you believe this claim was denied incorrectly, you can use the following template to submit an appeal.

[Your Practice Header]
[Date]

[Payer Name]
[Appeals Department Address]

RE: Appeal for Claim [Claim Number]
Patient: [Patient Name]
ID: [Patient ID]
Date of Service: [Date]
Denial Code: CO-142 - Monthly Medicaid patient liability amount

Dear Appeals Department,

I am writing to appeal the denial of the above-referenced claim, which was denied with code CO-142: "Monthly Medicaid patient liability amount".

We are appealing the application of the CO-142 monthly patient liability adjustment on this claim. Our records and billing ledger indicate that the patient's monthly Medicaid liability (share of cost) for the specified service month had already been fully satisfied through other claims submitted earlier in the cycle. Pursuant to state Medicaid guidelines and CMS regulations regarding patient spend-down coordination, once the patient's monthly liability threshold is met, Medicaid must assume responsibility for 100% of the allowed reimbursement on subsequent covered services. We respectfully request that you review the patient's accumulative monthly ledger and reprocess this claim for full payment.

Attached please find:
1. A copy of the original claim.
2. The relevant medical records supporting the service.
3. [Any other supporting documents].

We respectfully request that you reprocess this claim for payment.

Sincerely,

[Your Name]
[Title]
[Practice Name]