CO-167 Denial Code: Diagnosis Not Covered

What Does CO-167 Mean?

CO-167 means the payer does not cover services for the diagnosis submitted on the claim. Unlike CO-50 (service not necessary), CO-167 targets the ICD-10 code itself — this diagnosis is excluded, non-covered, or unsupported for the billed service under the plan.

Code group: CO (Contractual Obligation) · Appealable: Yes when the payer misapplied its own policy, or via corrected claim when documentation supports a more accurate covered code.

Why CO-167 Happens

The claim carried an unspecified or truncated ICD-10 code when the payer's policy requires specific codes — coding 'M54.5 low back pain' territory when the documentation supports a precise, covered diagnosis.
The diagnosis is genuinely excluded by the plan: cosmetic indications, certain screening diagnoses on plans without that benefit, or experimental indications for the service.
The wrong diagnosis was linked to the service line — diagnosis pointer errors put an unrelated ICD next to the CPT.
The primary diagnosis position matters: a covered diagnosis sat in position 2 while a non-covered one occupied position 1.

How to Fix a CO-167 Denial — Step by Step

Re-read the documentation. In most CO-167 denials the note supports a more specific or different diagnosis than what was coded.

Check the payer policy for the CPT code and identify its covered diagnosis list.

If the record supports a covered, accurate diagnosis, submit a corrected claim with the right ICD-10 code and correct diagnosis pointers. Never change a diagnosis to something the record doesn't support — that is fraud.

If the diagnosis is accurate and simply not covered, determine patient responsibility: was a waiver/ABN obtained? Can the patient's plan exclusions be confirmed?

Appeal only when the payer's covered-diagnosis list actually includes your submitted code — policy misapplication happens regularly.

CO-167 Appeal Letter Template

Adapt this wording to your claim — replace the bracketed fields and attach the documentation it references:

The claim for CPT [code] on [DOS] was denied under CO-167. The submitted diagnosis [ICD-10] appears on your coverage policy [policy ID] list of covered indications for this service, effective [date]. We request reprocessing. [Alternatively: A corrected claim has been submitted reflecting the documented diagnosis of (specific ICD-10), which is a covered indication.]

How to Prevent CO-167

Code every encounter to the highest documented specificity — unspecified codes are CO-167 magnets.
Build diagnosis-CPT pairing edits for your top services into the scrubber.
Audit diagnosis pointer accuracy — wrong pointers cause silent denials that look like coverage problems.

Related Denial Codes

CO-50 — Not medically necessary CO-16 — Missing information CO-11 — Diagnosis inconsistent

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Reviewed by the LegitMedBilling denial management team. This guide is general billing information, not legal or payer-specific advice — always verify against your payer contract and current policy.

Frequently Asked Questions

What's the difference between CO-167 and CO-50?

CO-50 says the service wasn't medically necessary under policy criteria; CO-167 says the diagnosis itself isn't covered for this service or plan. The fix overlaps — both usually come down to diagnosis specificity and payer policy — but CO-167 is more often resolved with a corrected claim than a clinical appeal.

Can we just swap the diagnosis for one the payer covers?

Only if the medical record genuinely supports it. Recoding to a covered diagnosis the documentation doesn't support is a false claim. The correct sequence is: read the note, code what it says at full specificity, and appeal or bill the patient when a truly non-covered diagnosis is accurate.

Can the patient be billed for CO-167 denials?

Often yes, if the diagnosis is accurate and the plan genuinely excludes it, and required notices were given (ABN for Medicare). Check your contract's notice requirements before transferring balances.