CO-24 Denial Code: Charges Covered Under a Capitation Agreement / Managed Care Plan

What Does CO-24 Mean?

CO-24 means the payer believes this patient's care is covered under a capitation arrangement or managed care plan — so the fee-for-service claim you sent is being refused. Either the patient is enrolled in an HMO/Medicare Advantage plan you should have billed instead, or you (or their PCP group) receive a monthly capitation payment that already covers this service.

Code group: CO (Contractual Obligation) · Appealable: Usually redirected rather than appealed. Appealable when the enrollment data is wrong or the service is contractually carved out of the cap.

Why CO-24 Happens

The patient is enrolled in a Medicare Advantage or Medicaid managed care plan, and the claim went to traditional Medicare/Medicaid — the FFS program answers with CO-24 because the MCO holds the risk.
Your practice participates in a capitated contract for this patient population, and the billed service falls inside the capitation payment — separately payable only if carved out of the cap.
The patient changed plans and enrollment data lagged: their old FFS coverage shows the new managed-care enrollment and refuses everything after the switch date.
The service is genuinely carved OUT of the capitation (many caps exclude labs, immunizations, or procedures) but the claim didn't carry the required carve-out coding or went to the wrong entity.

How to Fix a CO-24 Denial — Step by Step

Run eligibility for the exact date of service — it reveals the managed care plan or capitated assignment behind the denial.

If the patient is in an MA or Medicaid MCO, redirect the claim to that plan. This is a rerouting exercise, not an appeal; attach the CO-24 remittance if the MCO raises timely filing.

If you hold a capitated contract, check the fee schedule exhibit: is this service inside the cap (already paid via your monthly check) or carved out (separately billable)? Bill carve-outs with the coding the contract specifies.

For plan-change situations, confirm the enrollment effective date; services before the switch belong to the old payer and may need reprocessing with proof of the coverage window.

Update the patient's record so future claims route correctly the first time.

CO-24 Appeal Letter Template

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

CO-24 rarely calls for an appeal at the denying payer — the claim usually belongs somewhere else. Where the denial is wrong: 'Claim [number] was denied CO-24; however, the patient was not enrolled in a capitated/managed care arrangement on [DOS] per the attached eligibility response, or the billed service [CPT] is carved out of the capitation agreement per contract section [ref]. We request reprocessing under fee-for-service terms.'

How to Prevent CO-24

Real-time eligibility on every visit — it names MA plans, MCOs, and capitated assignments before you bill.
Keep a carve-out list for every capitated contract at charge entry.
Audit your capitation rosters monthly against your schedule; patients you're capitated for shouldn't generate FFS claims inside the cap.

Related Denial Codes

CO-109 — Wrong payer CO-22 — COB / other payer CO-256 — Managed care contract

← Back to the full denial code library

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

Does CO-24 mean we don't get paid at all?

Not necessarily. If the service is inside a capitation you participate in, you were already paid via the monthly capitation check. If the patient belongs to an MCO you don't hold a cap with, the claim is payable — by that MCO, not the payer you billed. Only services inside a cap you've already been paid for are truly 'done.'

The patient showed a Medicare card. Why did Medicare deny CO-24?

Because the patient is enrolled in a Medicare Advantage plan — Medicare's enrollment file knows it even when the patient presents the old red-white-and-blue card. Bill the MA plan shown in the eligibility response. This is one of the two classic MA-trap denials, alongside CO-109.

How do we know what's inside our capitation versus carved out?

Your capitation contract's exhibits list covered (capped) services and carve-outs. If you can't produce that list at charge entry, you're either writing off billable carve-outs or submitting claims the cap already paid — both expensive. Request the current exhibit from the payer's provider relations if you don't have it.