Quick Explanation
Denial code CO-86 occurs when a claim is denied or processed with reduced payment because the rendering provider or facility does not have a participating contract with the patient's specific health insurance plan. This means the service is considered out-of-network, which may result in higher patient cost-sharing or a complete lack of coverage depending on the plan structure.
Common Causes for CO-86
Denials with code CO-86 typically happen for the following specific reasons:
- The provider's credentialing or enrollment status with the payer was inactive, pending, or had lapsed at the time the medical service was rendered.
- A patient with a highly restrictive network plan, such as an HMO or EPO, received non-emergent care from an out-of-network provider without a pre-authorized out-of-network referral.
- The billing provider is contracted with certain product lines of a payer (such as PPO) but is non-participating in others (such as Medicaid Managed Care or Exchange plans).
- Emergency services were performed at an out-of-network facility, and the payer failed to process the claim under the protective guidelines of the federal No Surprises Act.
How to Prevent CO-86 Denials
To avoid receiving this denial in the future, implement these specific checks:
- Perform comprehensive real-time eligibility and benefits verification prior to scheduling to verify the provider's active network participation status for the patient's specific plan type.
- Maintain a proactive credentialing schedule and utilize CAQH to ensure all provider enrollments, demographic updates, and contract renewals are completed well ahead of expiration dates.
- Secure formal out-of-network referrals or prior authorizations before delivering non-emergent care when an in-network option is unavailable.
- Implement an automated billing system alert that flags out-of-network patient accounts during registration to prompt immediate staff review of network status and waiver requirements.
Appeal Letter Template for CO-86
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-86 - Service was provided by a non-participating provider
Dear Appeals Department,
I am writing to appeal the denial of the above-referenced claim, which was denied with code CO-86: "Service was provided by a non-participating provider".
We are writing to appeal the denial of this claim under code CO-86 (Service was provided by a non-participating provider). Although the rendering provider is non-participating with this specific plan, the services rendered are eligible for in-network coverage and reimbursement. Specifically, this care represents an emergency medical condition as protected under the Emergency Medical Treatment and Labor Act (EMTALA) and the No Surprises Act (45 CFR ยง 149.110), which mandates that emergency services provided by non-participating providers must be covered without prior authorization and at in-network cost-sharing rates. Alternatively, if this was an authorized transition of care, we have attached the approved out-of-network referral/authorization. We respectfully request that you review the attached documentation and reprocess this claim for payment at the in-network rate.
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]
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