Can I bill the patient for the CO-45 amount?

No — if you are in-network, the CO-45 amount is a contractual write-off and balance billing the patient for it violates your payer contract and, in many states, balance billing laws. Out-of-network situations follow different rules, including the No Surprises Act.

Is CO-45 always a write-off?

Usually, but not always. CO-45 is only correct when the allowed amount matches your contracted rate. Payers do misprice claims — practices that never verify allowed amounts against contracts routinely absorb underpayments.

Why is my CO-45 amount so large?

Either your charges are set far above contracted rates (common and harmless), or the payer priced you on the wrong fee schedule (harmful). Compare the allowed amount to your contract to know which one it is.

How is the CO-45 amount calculated?

It is your billed charge minus the allowed amount. For example, a $150 charge for 99213 with a 2026 Medicare allowed amount of $95.19 gives a CO-45 adjustment of $54.81.

CO-45 Denial Code: Charge Exceeds Fee Schedule / Maximum Allowable — Meaning, Fix & Appeal

What Does CO-45 Mean?

CO-45 means the amount you billed is higher than the payer's contracted or allowed amount for that service. The difference is a contractual adjustment — the payer is telling you to write it off, and in-network providers cannot bill the patient for it.

Code group: CO (Contractual Obligation) · Appealable: Only when the allowed amount is below your contracted rate. Routine CO-45 contractual adjustments are not appealable — they are the normal difference between charges and contracted rates.

Why CO-45 Happens

You are in-network and billed your standard charge, which is normally higher than the contracted rate. Some CO-45 on every remittance is completely normal — it is how contractual write-offs are communicated.
The payer applied the wrong fee schedule — for example, pricing you as out-of-network, using an outdated contract year, or applying the wrong locality. This is where real money hides.
Your chargemaster is set below or barely above contracted rates, so you cannot detect underpayments because everything 'matches.'
The claim was priced under a different provider's contract because of an NPI, taxonomy, or group enrollment mix-up.

How to Fix a CO-45 Denial — Step by Step

Compare the allowed amount on the remittance against your actual contracted rate for that CPT code — not against your charge. If they match, the adjustment is correct and should be written off.

If the allowed amount is lower than your contract says, this is an underpayment, not a normal adjustment. Gather your fee schedule exhibit and contract effective dates.

Contact the payer's provider relations line and request a claim reprocessing with the correct fee schedule. Reference the contract section and rate.

If the payer refuses, file a formal underpayment appeal with the contract exhibit attached — most contracts have a specific dispute window, often 90–180 days.

Track CO-45 variances monthly by payer. A pattern of small underpayments across thousands of claims adds up to serious revenue.

CO-45 With Real Numbers: A 2026 Medicare Example

Here is how CO-45 shows up on a real Medicare claim. Say a practice bills $150 for a 99213 office visit in 2026. The national Medicare allowed amount for 99213 in an office is $95.19, and the patient has already met the deductible.

Line on the remittance	Amount	What it means
Billed charge	$150.00	Your fee for the visit
CO-45 adjustment	$54.81	Charge minus the allowed amount. You write this off.
Allowed amount	$95.19	The 2026 national Medicare rate for 99213 (office)
PR-2 coinsurance	$19.04	The patient owes 20% of the allowed amount
CO-253 sequestration	$1.52	The 2% federal cut taken from Medicare's share
Medicare payment	$74.63	80% of the allowed amount, less 2%

The lines add back up to the $150 charge: $54.81 + $19.04 + $1.52 + $74.63. If the deductible was not met, part of the allowed amount shows as PR-1 instead of being paid.

How to check yours. Look up the allowed amount for your code and area in our Medicare fee lookup. If Medicare allowed less than that, or a commercial plan allowed less than your contract, it is an underpayment, not a normal CO-45. If you are not a participating Medicare provider, Medicare allows 95% of the fee schedule amount.

Watch for a CO-45 of zero. Medicare pays the lower of your charge or the fee schedule. If your charge is below the allowed amount, there is no CO-45 and you are paid your own lower charge. A zero CO-45 on a common code usually means your fee schedule is set too low.

Source: CMS Physician Fee Schedule, 2026 RVU file (conversion factor $33.4009).

CO-45 Appeal Letter Template

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

This claim was adjusted under reason code CO-45; however, the allowed amount of [$X] does not match the contracted rate of [$Y] for CPT [code] under our participation agreement effective [date], fee schedule exhibit [ref]. We request reprocessing at the correct contracted rate and payment of the difference of [$Z].

How to Prevent CO-45

Load payer fee schedules into your PM system so every payment is auto-compared to contract.
Review your chargemaster yearly and keep charges above your highest contracted rate.
Audit a sample of paid claims per payer each quarter for silent underpayments.

Related Denial Codes

CO-97 — Bundled service CO-16 — Missing information CO-109 — Wrong payer

← 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.

CO-45 Denial Code: Charge Exceeds Fee Schedule / Maximum Allowable