Official CARC description: “Expenses incurred after coverage terminated.” Here’s what it actually means, why it fires, and how to get the claim paid.
The plan says coverage ended before the DOS. As a CO code the payer is also saying the provider should have caught it — which is exactly why eligibility workflow, not appeals, is the long-term fix.
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-27, CO27, “denial code 27”, “27 denial code” or “reason code 27” — same CARC, different ERA formatting.
Reason code 27 also appears under another group on the ERA. The number is the reason; the prefix decides who absorbs the money. This page covers CO 27 (Contractual Obligation). If your ERA shows a different prefix, use the matching page:
Re-verify eligibility — look for a successor plan first, it usually exists
Bill the new plan; original submission date protects timely filing
If retro-termed after you verified: fight it (see appeal angle)
If truly uninsured for the DOS: patient becomes self-pay with notice
Appeal retro-terminations when you verified coverage before service: attach the eligibility verification (date/time-stamped 271 or portal screenshot). Several states restrict retro-terms after verified auth — cite yours.
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 27 is: “Expenses incurred after coverage terminated.” In practice: The plan says coverage ended before the DOS. As a CO code the payer is also saying the provider should have caught it — which is exactly why eligibility workflow, not appeals, is the long-term fix.
Denial code 27 under the CO group (Contractual Obligation) means: Expenses incurred after coverage terminated. 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 27, CO-27, CO27 and “denial code 27” 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.
Appeal retro-terminations when you verified coverage before service: attach the eligibility verification (date/time-stamped 271 or portal screenshot). Several states restrict retro-terms after verified auth — cite yours.
The number 27 is the same reason code in both — what changes is the liability group. PR 27 is Patient Responsibility. CO 27 is Contractual Obligation, so the provider absorbs it. Check the prefix on the ERA before you write anything off or bill the patient — a mis-grouped 27 is one of the more winnable appeals.