Denial code · CARC 97
CARC 97 (CO-97): bundled behavioral-health services
What CO-97 means, the NCCI and per diem bundling rules behind it in psychiatry, therapy, IOP and PHP, and when a modifier on a corrected claim is legitimate.
By the ClaimParrot editorial team · Who we are · Reviewed · 4 min read · 5 cited sources
Quick answer
CARC 97 means the payer treats the service as part of another service it already processed, so it pays nothing extra. In behavioral health that usually means an NCCI pair edit, such as a psychiatric evaluation billed with psychotherapy on the same day, or a service folded into a program per diem. Rebill with a modifier or appeal only when the services were genuinely separate.
| Item | Detail |
|---|---|
| Code | CARC 97 · Active on the X12 list; checked October 14, 2026 |
| Plain meaning | The payer considers this service part of another service it has already processed, so it pays nothing extra for it. |
| Group codes seen | CO (contractual obligation) |
| Common remark codes | M15, M80, N20, N19 |
| Where it shows up in BH | Psychiatry and medication management, Outpatient therapy, Intensive outpatient (IOP), Withdrawal management (detox) |
| Usual next step | Write off, or correct with a modifier if the services were truly distinct |
| Related codes | CARC 4, CARC 151, CARC 16 |
What does CARC 97 mean?
CARC 97 is a payment-rule denial: the service may be fine, but the payer considers its value already included in another service on the same claim or date. The questions are whether a coding rule truly bundles the pair, and whether the services were distinct enough for an exception.
Medicare and Medicaid apply National Correct Coding Initiative (NCCI) pair edits, and commercial payers publish their own bundling rules in payment policies. An NCCI-associated modifier certifies that the services were separate and distinct, so it is a statement about the record, not a billing trick.
What does CO-97 mean for who pays?
CO-97 is the normal form: bundling rules are part of the payment terms, so the bundled amount is a provider write-off and cannot be billed to the patient. Treat a PR-97 as an error to query, because the patient should not pay separately for a service the plan says is already included.
| Group + reason | What it signals | Who usually carries the balance |
|---|---|---|
| CO-97 | Service treated as included in another payment | Provider; not billable to the patient |
Which remark codes come with CARC 97?
These remark codes say how the payer bundled the service.
| Remark code | What it adds | What to check |
|---|---|---|
| M15 | The services billed separately were treated as parts of one procedure, so only one payment applies. | Which component codes the payer combined |
| M80 | Not paid when done in the same session or on the same day as a service already processed. | Whether the services were in the same session or on the same date |
| N20 | The service is not paid together with another service billed for the same date. | The same-date rule the payer applied |
| N19 | The procedure is considered incidental to the main procedure on the claim. | Which code the payer treated as primary |
Where does CARC 97 show up in behavioral health?
In behavioral health, CO-97 comes mostly from same-day psychiatric code pairs and program per diems. NCCI says a diagnostic psychiatric evaluation is not billed with psychotherapy on the same date and E/M codes are not billed with those evaluations; payers also fold some services into IOP or PHP day rates.
| Care setting | Typical trigger | Check first |
|---|---|---|
| Psychiatry and medication management | 90791 or 90792 billed with psychotherapy, or an E/M with either evaluation, on one date | The NCCI edit and the dates of each service |
| Outpatient therapy | Family psychotherapy billed with individual psychotherapy without a separate time interval | Notes showing separate, distinct sessions |
| Intensive outpatient (IOP) | Group therapy or assessments billed on top of a per diem that includes them | The payer's per diem definition |
| Withdrawal management (detox) | Substance-use screening and intervention codes billed with an E/M for the same work | Whether the screening was separate in time and purpose |
Corrected claim, reconsideration or appeal: which fits CARC 97?
Check the edit first. If the pair is bundled and the services were not separate, the line is a write-off. If they were distinct and the edit allows a modifier, send a corrected claim with the right one. Appeal only when the payer bundled contrary to its own published policy or your contract.
- 01Identify the rule: NCCI pair edit, payer payment policy or per diem definition.
- 02Distinct services (separate time and purpose) and a modifier-eligible edit: correct the claim with the appropriate modifier.
- 03Payer misapplied its own policy or the contract: request a reconsideration with the policy attached.
What evidence resolves a CARC 97?
For CO-97 the record must show two genuinely separate services: separate times, separate clinical purposes and separate documentation. Payment-policy evidence matters too, because the dispute may turn on whether the payer applied its own bundling rule or the contract correctly.
- Notes with start and stop times for each service
- Separate documentation of each service's purpose
- The NCCI edit or payer policy for the code pair
- The contract or per diem definition for program days
- The remittance lines showing the bundled pair
How do Medicare, Medicaid and commercial plans differ on CARC 97?
Medicare and Medicaid apply NCCI pair edits and medically unlikely edits, and Medicaid states can switch on optional add-on code edits; commercial payers publish their own bundling policies. Per diem programs add a layer: what the daily rate includes is defined by the payer or the state.
| Program | What differs |
|---|---|
| Medicare (Original) | NCCI pair edits apply; an NCCI-associated modifier (such as 59 or an X-modifier) is allowed only when services were separate and distinct. |
| Medicaid | Medicaid NCCI applies, with optional add-on code edits; per diem definitions come from the state plan and MCO contracts. |
| Commercial and ERISA plans | Payment policies set bundling and modifier rules; your contract can change how they apply. |
CO-97 on a same-day evaluation and therapy session
A fictional clinic billed a psychiatric diagnostic evaluation and an hour of psychotherapy on the same date for a new patient. The therapy line came back CO-97 with M80.
NCCI does not allow that pair on one date, and the notes showed one continuous visit, so the clinic wrote off the line and now schedules the first therapy session on a separate day when both are needed.
Names, dates, payers and amounts are invented for illustration.
What a ClaimParrot packet does here
- When CARC 97 needs an appeal rather than a corrected claim, an appeal packet answers the payer's stated reason.
- A person checks every packet: $29, or $99 for level of care, and the first is free (pricing).
- No remittances, records or PHI are sent: just the reason and a de-identified summary (Trust & security).
Every draft is reviewed and approved by your team. ClaimParrot does not make medical-necessity determinations or give legal advice.
Frequently asked questions
Can we bill the patient for a CO-97 line?
No. CO-97 says the service is paid as part of another one, so the patient has nothing separate to pay. Charging them would bill twice for the same work.
When is a 59 or X-modifier appropriate on a behavioral-health claim?
Only when the record shows the services were separate and distinct, for example at different times for different problems, and the edit allows a modifier. The modifier certifies that, so it must match the notes.
Is a psychiatric evaluation ever billable with psychotherapy on the same day?
Not under NCCI's psychiatric-services policy, which treats psychotherapy as including continuing evaluation. When both are needed, they belong on separate dates.
Does CO-97 mean our per diem rate was too low?
No. It means the payer considers the line included in a payment already made. If your contract defines the per diem differently, raise that in a reconsideration with the contract language.
Primary sources and references
- Claim Adjustment Reason Codes (CARC) code list · X12 · checked
- Remittance Advice Remark Codes (RARC) code list · X12 · checked
- 2026 Medicaid NCCI Policy Manual, Chapter XI §C (psychiatric services) and MUE guidance · CMS · checked
- CMS Change Request 14293 (Transmittal 13481): CORE 360 uniform use of CARCs, RARCs and group codes · CMS · checked
- Aetna provider disputes and appeals overview · Aetna · checked
General information, not legal or medical advice. Payer rules change; confirm deadlines and requirements in the notice and the plan documents. Read our editorial policy.
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