Very CommonContractual Obligation (CO)Other

CO-45: Charges exceed fee schedule or maximum allowable

The billed amount exceeds the payer's fee schedule, contracted rate, or maximum allowable amount. The payer is adjusting the charge to their allowed amount. This is technically an adjustment rather than a true denial -- the claim is being paid, but at the contracted rate.

Common Causes

  • Billed charges exceed the payer's contracted fee schedule amount
  • UCR (Usual, Customary, and Reasonable) limit applied to out-of-network claims
  • Medicare fee schedule amount is lower than billed charges
  • State Medicaid fee schedule limits applied

How to Resolve CO-45

  1. 1Review the allowed amount against your contract with the payer
  2. 2If the allowed amount is lower than your contracted rate, appeal with a copy of the contract
  3. 3For out-of-network claims, verify the UCR methodology used and negotiate if unreasonable
  4. 4Write off the contractual adjustment for in-network claims -- this is expected
  5. 5Do not balance bill patients for in-network contractual adjustments

How to Prevent CO-45 Denials

  • Understand your contracted rates with each payer
  • Review fee schedules annually during contract negotiations
  • Set up your billing system to flag when payments are below expected contracted rates
  • Negotiate rate increases during contract renewal periods

Stop Denials Before They Happen

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