Official CARC description: “Charges are covered under a capitation agreement/managed care plan.” Here’s what it actually means, why it fires, and how to get the claim paid.
The payer says this care is inside a capitated arrangement — either the patient is in a Medicare/Medicaid managed-care plan you billed FFS, or your group holds a cap contract that already “paid” for this service.
Liability group: CO = Contractual Obligation — the provider absorbs it — the amount cannot be billed to the patient. If the denial is wrong, the money is recovered by correcting or appealing the claim, not by balance-billing.
Also written: CO-24, CO24, “denial code 24”, “24 denial code” or “reason code 24” — same CARC, different ERA formatting.
Check eligibility for plan type and IPA assignment on the DOS
If MA/MCO member: bill that plan (new timely-filing clock usually applies)
If capitated: confirm the CPT is actually inside the cap — many aren't
Non-cap services denied as cap: dispute with the contract's division-of-financial-responsibility (DOFR) matrix
Appealable when the service falls OUTSIDE the capitation: attach the DOFR/contract exhibit showing the CPT is FFS-payable and demand adjudication. Pure cap services are write-offs.
Fill in the denial facts — use placeholders, never real patient data (the letter keeps [PATIENT NAME]-style fields so you can merge real details privately). A payer-ready draft with an enclosure checklist comes back in ~20 seconds.
Your appeal letter draft will appear here.
The official CARC description for CO 24 is: “Charges are covered under a capitation agreement/managed care plan.” In practice: The payer says this care is inside a capitated arrangement — either the patient is in a Medicare/Medicaid managed-care plan you billed FFS, or your group holds a cap contract that already “paid” for this service.
Denial code 24 under the CO group (Contractual Obligation) means: Charges are covered under a capitation agreement/managed care plan. The number is the reason; the CO prefix decides who is liable — the provider absorbs it — the amount cannot be billed to the patient. If the denial is wrong, the money is recovered by correcting or appealing the claim, not by balance-billing.
Yes. CO 24, CO-24, CO24 and “denial code 24” are the same CARC — clearinghouses, payer portals and PM systems just print it differently. Only the group prefix (CO, PR, OA or PI) changes the meaning, because it changes who has to absorb the amount.
CO stands for Contractual Obligation — the provider absorbs it — the amount cannot be billed to the patient. If the denial is wrong, the money is recovered by correcting or appealing the claim, not by balance-billing.
Appealable when the service falls OUTSIDE the capitation: attach the DOFR/contract exhibit showing the CPT is FFS-payable and demand adjudication. Pure cap services are write-offs.