CO-27 breaks that sequence. The payer processes the claim and returns it with a denial that points to coverage timing, not coding accuracy. X12 defines CARC 27 as “Expenses incurred after coverage terminated.” A CO-27 denial blocks cash flow, increases rework volume, and pushes avoidable balance conversations to the front desk and patient billing staff.
Multiple perspectives explain why CO-27 keeps showing up in high-performing revenue cycle operations. Eligibility data changes between scheduling and check-in. Member files update after retroactive actions. Coordination of Benefits (COB) remains stale. Registration data mismatches prevent the payer system from linking a claim to an active eligibility segment.
Denial trend data supports the front-end nature of this issue. Change Healthcare’s 2022 Revenue Cycle Denials Index reports an average initial denial rate near 12% and shows Registration/Eligibility as the top denial category at 22%, with front-end denials accounting for 41% of denials. CO-27 sits inside that front-end problem set.
What Is the CO-27 Denial Code?
Multiple perspectives clarify this denial. One perspective focuses on the CARC definition. Another perspective focuses on the group code that assigns financial responsibility. A third perspective focuses on the RARC message that reveals the precise coverage trigger.
CARC 27 means expenses were incurred after coverage terminated. The denial describes an eligibility window problem. The service date falls outside the payer’s recorded active coverage period.
Define CO-27 in Medical Billing Language
CO-27 translates to: “The payer’s system shows the member’s coverage ended before the date of service, so the claim is not payable under that coverage record.”
The CO part matters. CMS explains that group codes assign financial responsibility for the unpaid portion, with CO assigning responsibility to the provider and PR assigning responsibility to the patient. A remittance that returns CARC 27 under CO signals a payer-side contract adjustment rather than patient liability on that remittance line. Contract terms and payer policies determine patient billing rules, so internal policy review is required even when CO appears.
Clarify that it relates to coverage termination.
Coverage termination means the payer file lists an end date that precedes the date of service. The denial is driven by date logic. Clinical need, documentation quality, and CPT accuracy do not override a terminated eligibility segment in automated adjudication.
Distinguish it from coding or medical necessity denials
Multiple perspectives separate CO-27 from other denials:
- Coding denials focus on CPT/HCPCS, modifiers, diagnosis linkage, or NCCI edits.
- Medical necessity denials focus on coverage criteria and documentation support.
- CO-27 focuses on eligibility dates and enrollment status.
A corrected CPT does not resolve a terminated coverage segment. Eligibility proof and payer record correction resolve it.
Causes of the CO-27 Denial Code
Multiple perspectives explain root causes. One perspective focuses on payer file accuracy. Another perspective focuses on provider intake accuracy. A third perspective focuses on timing gaps between verification and service delivery.
CO-27 causes clustering into 2 categories:
- Payer-side coverage records outcomes such as termination, retroactive disenrollment, or plan enrollment restrictions
- Provider-side claim linkage errors, such as demographics mismatch, wrong subscriber ID, or missing COB alignment
Coverage lapse due to non-payment
Premium non-payment triggers termination after the plan’s grace period rules. The payer system closes the eligibility segment. Claims with service dates after that end date adjudicate to CARC 27.
A related RARC strengthens identification. RARC N619 states, “Coverage terminated for non-payment of premium.” A denial that pairs CARC 27 with N619 points to a premium lapse trigger rather than a data mismatch.
Incorrect date of service or patient details
Claim matching depends on exact identifiers. A mismatch in any of these fields blocks linking to an active eligibility segment:
- Patient name spelling
- Date of birth
- Subscriber ID
- Group number
- Date of service formatting or entry
One wrong digit in the member ID shifts the claim away from the active member record. Payer edits treat the claim as “not eligible under that identifier,” which often appears as a coverage-termination style denial at the service level.
Retroactive termination by the payer
Retroactive termination occurs when the payer updates coverage with a backdated end date. Providers deliver care under the best available information at check-in, then the payer later applies a revised eligibility segment during claim processing. The payer response returns CARC 27 because the service date now falls after the updated termination date.
RARC detail sometimes signals this pattern. X12 includes alert remark codes tied to retroactive actions in general, and payer portals frequently show “retro disenrollment” language in eligibility history. Denial teams treat retroactive termination as a documentation-heavy case because it often requires proof of eligibility status at the time of service.
Coordination of Benefits is not Updated
COB problems create false “inactive” outcomes when the payer expects a different primary payer or expects COB updates before payment. The payer then adjudicates to a denial pathway that looks like coverage inactivation.
A common paired remark code is RARC N52, which states: “Patient not enrolled in the billing provider’s managed care plan on the date of service.” A CARC 27 + N52 combination often indicates managed care enrollment alignment problems, not a coding problem.
Patient provided an inactive insurance card
Old cards persist in wallets, glove boxes, and employer packets. Front desk staff enter the outdated plan and member ID. The claim goes out under a terminated plan record and returns CO-27.
This failure mode traces to the intake workflow, not payer behavior. Real-time eligibility checks at check-in stop most of these denials before claim creation.
How to Fix a CO-27 Denial
Multiple perspectives support a structured fix. One perspective focuses on verifying the eligibility truth. Another perspective focuses on aligning the claim to payer records. A third perspective focuses on selecting the correct “corrected claim vs appeal” route.
A 5-step correction mindset resolves CO-27 faster than repeated resubmissions.
Step 1: Verify insurance coverage for the exact date of service
Eligibility verification must confirm these items:
- Effective date
- Termination date
- Plan product and network status
- Managed care enrollment status
- Primary vs secondary payer positioning
Eligibility proof must be stored. A dated eligibility response, portal screenshot, call reference number, or transaction log supports later reconsideration.
Step 2: Correct patient demographics and policy information
Data alignment fixes a large share of CO-27 denials. A clean checklist prevents misses:
- Patient name matches payer file
- Date of birth matches payer file.
- Subscriber ID matches payer file.
- Relationship code matches the payer file.
- Date of service matches the chart and the encounter record.
Claim resubmission should occur only after identifiers match payer eligibility records.
Step 3: Update Coordination of Benefits
COB work needs direct confirmation, not assumptions. The denial team should obtain:
- Primary payer name and member ID
- Secondary payer name and member ID
- Policyholder details for each payer
- Employer details when applicable
- Accident-related indicators, when applicable
RARC guidance supports this step selection. N52 points to a managed care plan enrollment mismatch. Fix actions focus on plan enrollment confirmation, correct payer selection, and payer file updates.
Step 4: Submit a corrected claim when the cause is data or payer selection
Corrected claims fit these scenarios:
- Wrong member ID
- Wrong plan billed
- Wrong payer order on the claim
- Missing COB updates
- Wrong patient demographic fields
Corrected claim packets should include:
- Corrected claim indicator and original claim reference
- Eligibility proof for the service date
- COB updates or payer-requested COB form when required
- Cover note that states the exact corrected fields
Payer-specific resubmission rules govern format, claim frequency limits, and attachments.
Step 5: Request reconsideration or file an appeal when coverage was active
Appeals fit these scenarios:
- Eligibility proof shows active coverage on the date of service
- The payer record shows termination that conflicts with the eligibility proof.
- Retroactive termination occurred after the service date, and the provider seeks payer review based on payer policy or plan rules.
Appeal packets should contain consistent elements:
- Copy of EOB/ERA showing CARC 27
- Eligibility proof forthe date of service
- Patient registration sheet that shows captured identifiers
- Any payer portal history screen that shows coverage status
- Written narrative that states: date of service, plan, member ID, and the conflict
Time limits differ by payer contract. Denial teams should route CO-27 appeals through the shortest internal queue because eligibility windows degrade with time.
Ways to Mitigate Claim Adjustment Code 27
Multiple perspectives explain mitigation as damage control rather than prevention. One perspective focuses on accelerating recovery. Another perspective focuses on preventing repeat touches. A third perspective focuses on patient financial pathways after confirmed termination.
Mitigation actions reduce revenue loss after the denial exists:
- Denial triage within 24–48 hours to preserve appeal windows and reduce aging
- Single-owner assignment, so one staff member owns each CO-27 from research through closure
- Standard documentation packet to reduce rework and missed attachments
- Payer call script that requests: effective/termination dates, retro term reason, managed care enrollment status, and call reference number.
- Patient outreach template that requests updated insurance details, employer plan changes, and secondary coverage
Change Healthcare’s denials index data supports front-end focus and avoidability. Mitigation succeeds when the team treats CO-27 as a front-end denial type with a repeatable documentation kit.
Preventing CO-27 Denials Before They Occur
Multiple perspectives support prevention because the denial is driven by eligibility timing. One perspective focuses on real-time verification. Another perspective focuses on staff training and data quality. A third perspective focuses on automation tools that block claims with inactive coverage indicators.
Perform Real-time Eligibility Checks Before Every Visit
Eligibility checks must occur on the date of service, not only at scheduling. Verification should confirm:
- Coverage is active for today’s date
- Termination date not present or not before today
- Managed care enrollment is present when required.
- Primary and secondary status confirmed
Real-time checks prevent the “coverage changed after scheduling” problem and reduce exposure to retro updates that appear in the payer file between scheduling and check-in.
Train the Front Desk and Billing Staff
Training needs operational detail, not general concepts. Staff training should cover:
- Reading eligibility responses for active/terminated language
- Identifying warning indicators, such as grace period or pending enrollment messages
- Entering subscriber IDs without transposition errors
- Capturing relationship codes and policyholder names accurately
Training outcomes should be measured with 3 metrics:
- CO-27 denial rate per 1,000 claims
- Registration error rate tied to member ID/DOB mismatches
- Rework touches per CO-27 denial.
Update COB regularly
COB becomes stale through job changes, plan switches, divorce events, and aging into Medicare. A twice-yearly COB refresh reduces false payer orders and enrollment conflicts.
COB refresh events should trigger at these moments:
- Annual visit
- New patient visit
- Reported insurance change
- Medicare enrollment event
Monitor payer Policy Updates
Policy updates shift eligibility rules, enrollment requirements, and managed care plan restrictions. Workflow owners should monitor payer portals and bulletins, then update internal checklists.
CMS guidance on remittance advice emphasizes standardized code usage and group code responsibility assignment, which supports consistent denial interpretation and staff training.
Use clearinghouse alerts and claim scrubbers
Scrubbers reduce CO-27 volume by flagging:
- Inactive eligibility indicators
- Missing COB indicators
- Payer mismatch patterns
- Subscriber ID formatting errors
Automation works best when paired with a human escalation step that stops the encounter from moving forward with outdated insurance data.
RARCs Associated With CARC 27
Multiple perspectives explain why RARCs matter. One perspective treats CARC as the category and RARC as the trigger. Another perspective treats RARC as the action selector for correction vs appeal.
X12 describes RARCs as codes that add explanation for an adjustment already described by a CARC. CO-27 becomes easier to resolve when the denial team reads the RARC first, then selects the workflow branch.
Common RARCs that appear with CARC 27 include:
- N52: “Patient not enrolled in the billing provider’s managed care plan on the date of service.”
Fix route: managed care enrollment confirmation, payer selection review, provider participation check, and member plan assignment validation. - N619: “Coverage terminated for non-payment of premium.”
Fix route: patient outreach for reinstatement status, payer confirmation of reinstatement rules, resubmission after reinstatement when payer policy supports reprocessing. - N622: “Not covered based on the date of injury/accident.”
Fix route: accident date validation, liability or workers’ compensation pathway review, payer order correction. - N650: “This policy was not in effect for this date of loss. No coverage is available.”
Fix route: policy effective date confirmation, plan selection correction, patient insurance update, and alternate payer search.
RARC-driven routing reduces wasted resubmissions because each remark code points to a narrower root cause.
Conclusion
Multiple perspectives show CO-27 as a controllable denial. Coverage termination logic drives the denial, not coding logic. X12 defines CARC 27 as expenses incurred after coverage terminated. CMS explains that group codes such as CO and PR assign financial responsibility on the remittance. Those standards support consistent denial interpretation across payers.
CO-27 resolution succeeds through a repeatable workflow: verify eligibility for the exact service date, align claim identifiers to payer files, correct COB, submit corrected claims only after data alignment, and appeal only with documented eligibility proof. Prevention succeeds through real-time eligibility checks, intake accuracy controls, COB refresh cadence, and scrubber-based front-end edits.
FAQs
What does the denial code CO-27 mean?
CO-27 indicates CARC 27 returned under the CO group code, with CARC 27 defined as “Expenses incurred after coverage terminated.”
Can CO-27 be appealed?
CO-27 appeals fit cases where documented eligibility shows active coverage on the date of service or where payer records reflect a retroactive termination that conflicts with eligibility proof.
Why does CO-27 occur after eligibility verification?
Eligibility changes occur between verification and the date of service, retroactive termination updates occur after the visit, COB conflicts block payable status, or patient identifiers do not match payer files.
Is the CO-27 patient’s responsibility?
CMS explains that PR assigns responsibility to the patient, and CO assigns responsibility to the provider on the remittance. Patient billing rules still depend on payer contracts, state rules, and patient notice practices, so internal compliance review remains required.
How long do I have to fix a CO-27 denial?
Payer contracts set reconsideration and appeal filing limits. Denial teams should treat CO-27 as a front-end denial and work it early to protect filing windows and reduce aging.
