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XIFIN Makes Progress on Misuse of CO-45 Remediations

  • Principal IT Systems Analyst, EDI, XIFIN

Last August, XIFIN reported that it had collected evidence of widespread and longstanding misuse of the CO-45 Remittance Advice Reason Code (RARC). The CO-45 is a charge that exceeds the fee schedule/maximum allowable or contracted/legislated fee arrangement. It represents the facility's contractual payment obligation, and the patient cannot be billed for that amount, which, instead, should be adjusted off the patient’s bill. Per the X12 spec, the CARC45 cannot be used to adjust off the entire amount of the procedure code. XIFIN was able to identify a multitude of payors that were consistently misusing the CARC45 code in this manner.

XIFIN data revealed that many payors or ERA providers were using the CO/PR-45 to handle full denials or non-payment of claims instead of a more applicable denial or reason code for situations like non-covered services, procedure code bundling, etc. This direct violation of the RARC standard, where the wrong service code is applied, will often lead providers to improperly bill the patient or write off the claim.

After identifying the top 32 payors with the highest occurrences of CO/PR45 misuse, XIFIN contacted the payors and began working with them to gain system remediations that would address the misuse. Many payors have since corrected the issues, but a few are still in violation, including Anthem, which has the largest volume among the remaining providers.

Here is a look at the recent progress that the XIFIN’s CO-45 resolution team of experts has made by categorizing payors by resolution stage:

Escalations — XIFIN has received no response, and the EDI operations team is escalating this issue in the respective payor organizations. The EDI team’s senior members will be managing the unresponsive escalations.

Researching solution — The payor is researching the issue with its technical teams. When research is complete, and an update is in progress, the payor will move to pending resolution.

Pending resolution — The payor is actively working on resolving the issue. The XIFIN team has not been provided an estimated date of deployment

Resolved — The payor has completed work in its system.

To demonstrate how difficult it can be to correct these errors and misuses, here is a snapshot of recent activity.

October 2019

XIFIN’s team of experts reached out to payors to proactively research the issue of receiving additional ECDs. Out of the 22 payors listed in the resolved category, 16 had updated their systems to fix the issue, and three had future ECDs. BCBSAL moved its ECD to November 2019, so a resolution confirmation check was rescheduled. XIFIN also continued to reach out to the last two payors (Centene and Affinity) regarding confirmation of their resolution of the CARC45 misuse.

November 2019

The XIFIN team reported that Blue Cross California was still misusing the CARC45 code, and since August 3, 2019, Community First Health Plan significantly decreased their misuse of the CARC45. The XIFIN team continues to monitor for any misuse.

In a second November 2019 update, XIFIN noted that Blue Cross California was still using the CARC45 code and that Anthem’s resolution would also fix Blue Cross California’s issue. Therefore, XIFIN contacted Anthem in an attempt to accelerate the resolution of both payors’ issues. Also, Centene and Affinity provided ECDs from June 2019 and August 2019. XIFIN’s analysis of this data showed these payors were still misusing the code. XIFIN reached out to try to resolve the code misuse as well.

December 2019

Anthem reported that it fixed its CARC45 issue for the example that the XIFIN team provided. XIFIN asked Anthem whether it determined that the fix applied to all future 835s. Anthem said it was reviewing the question and would respond within three weeks. Also, two of XIFIN’s resolved payors had ECDs that passed. XIFIN continued reaching out for confirmation that the issue had been resolved.

February 2020

XIFIN is currently making progress with Anthem which has the largest volume of misuse of the remaining payors. XIFIN is scheduling a call with Anthem to work through the issue and assist them with determining how they can resolve this misuse. Look out for more updates on this issue in an additional blog post.


XIFIN remains dedicated to gaining full remediation of this misuse and continues to track, analyze, and follow up with payors. It is just one example of the extraordinary nature of XIFIN’s managed services, as well as the company’s ability to identify issues like this one that cross payors and affect multiple laboratories. XIFIN, with its rich data and analytics and high transaction volume, is uniquely positioned to engage payors and effect change. 


Published by XIFIN
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