Official CARC description: “Charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement.” Here’s what it actually means, why it fires, and how to get the claim paid.
CO 45 is usually not a denial at all — it's the contractual write-off between your charge and the allowed amount. It becomes a problem when the payer applies the wrong fee schedule, prices you as out-of-network, or the “write-off” quietly swallows money your contract owes you.
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.
Compare the allowed amount to YOUR contracted rate for that CPT — not just the EOB math
If the rate is wrong: request reprocessing with the contract section attached
If processed OON incorrectly: fix the roster/enrollment and reprocess
Track CO 45 write-off percentages by payer monthly — drifts reveal repricing errors
Appeal only when the pricing is provably wrong: attach the fee schedule page or contract rate exhibit and demand reprocessing at the contracted rate. Routine CO 45 on correctly priced claims is a write-off, not an appeal.
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.
Charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement. In practice: CO 45 is usually not a denial at all — it's the contractual write-off between your charge and the allowed amount. It becomes a problem when the payer applies the wrong fee schedule, prices you as out-of-network, or the “write-off” quietly swallows money your contract owes you.
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 only when the pricing is provably wrong: attach the fee schedule page or contract rate exhibit and demand reprocessing at the contracted rate. Routine CO 45 on correctly priced claims is a write-off, not an appeal.