CO-24 at a glance
CO-24 | |
|---|---|
Group code | CO, Contractual Obligation (X12) |
CARC 24 text (X12) | Charges are covered under a capitation agreement/managed care plan. |
In the X12 list since | January 1, 1995. Last modified September 30, 2007 |
What it means for a therapy practice | The plan pays for this member's care through a fixed per-member amount, not per claim |
Who owes the line | Nobody on this claim. The capitated provider was already paid |
Usual action | Confirm who holds the capitation for this member, then post, redirect or dispute |
"Charges are covered under a capitation agreement/managed care plan": what it means
Under capitation, a plan pays a provider group a fixed amount for each assigned member every month, whether those members come in or not. In return the group provides an agreed set of services. Because the money has already been paid, a claim for one of those services pays nothing, and the remittance explains the zero with CARC 24.
An illustrative contract, with made‑up numbers: a fictional group practice agrees to provide outpatient therapy for 1,500 members of a plan at $1.80 per member per month. It receives $2,700 every month. A 90834 claim for one of those members comes back at $0 with CO‑24, and that's the contract working as written.
When a CO-24 is correct, and when it isn't
Situation | Is CO-24 right? | What to do |
|---|---|---|
You hold the capitation for this member and the service is in it | Yes | Post it as a contractual adjustment. Keep sending claims if the contract asks for encounter data |
The member is assigned to a different medical group or behavioral health organization | Yes, for this payer | Find the group that holds the capitation and ask whether it will authorize and pay you |
Your contract lists this service as paid fee-for-service outside the capitation | No | Send a reconsideration with the contract page that carves the service out |
The member's assignment to your group hadn't started on the date of service | No | Ask the plan for the assignment dates and to reprocess the claim |
You're not in any capitated arrangement with this plan | No | Call the plan. The member or provider file is probably wrong |
The second row is the one that surprises therapists. In delegated managed care, the plan hands a member's care, and the money for it, to a medical group or a behavioral health company. The plan itself then has nothing to pay you with. You get paid, if at all, by the group that holds the capitation, under its own authorization rules.
Capitation denial in medical billing: CO-24 vs similar codes
Code | X12 text | How it differs from CO-24 |
|---|---|---|
CO-24 | Charges are covered under a capitation agreement/managed care plan. | The service was prepaid through capitation |
CO-256 | Service not payable per managed care contract. | The managed care contract excludes the service, with no prepayment implied |
CO-104 | Managed care withholding. | The claim was paid, minus an amount held back under the contract |
PR-242 | Services not provided by network/primary care providers. | You aren't the network or primary care provider, and the member is liable |
CARC 24 has been in the list since 1995, while X12 added CARC 256 on June 2, 2013, so older billing guides only know the first. If a remittance says CO‑24 and you have no capitation anywhere near this member, ask whether 256 or a network code was meant.
How to work a CO-24 denial
- Run eligibility for the date of service and note the plan product and any assigned medical group, primary care provider or behavioral health organization.
- Check your own contracts. Do you hold a capitation agreement that covers this member, this service and this date?
- If you do, post the line as a contractual adjustment and make sure the encounter was reported the way the contract requires.
- If another group holds the capitation, contact it for authorization and its claims address before the next session, and tell the client what you find.
- If the payer has the member or your contract wrong, ask for the claim to be reprocessed and write down the call reference number.
Before the first session with a managed care client
Ask the client for the full plan name on the card and whether it lists a medical group or primary care provider. Then check whether behavioral health is handled by a separate company. A five‑minute call before intake saves a run of CO‑24 lines for sessions you can't bill anyone for.
Session codes these claims usually carry: 90837 and 90832 for individual therapy, 90847 for family sessions and 90791 for the intake evaluation.
CPT is a registered trademark of the American Medical Association. CPT codes copyright 2026 American Medical Association. All rights reserved.
Related denial codes: CO-256 for a service not payable under a managed care contract, PR-242 for out‑of‑network care, CO-288 for a missing referral and CO-45 for an ordinary fee schedule write‑off.
Checked against the X12 Claim Adjustment Reason Code list on October 26, 2026. CARC 24 was last modified on September 30, 2007, and nothing about it changed this year.