What Does CO 45 Mean on an EOB?

An Explanation of Benefits (EOB) is a statement from your health insurance company detailing how a medical claim was processed. EOBs often contain various codes. Understanding these codes is important for managing healthcare costs. This article clarifies one common code: CO 45.

Decoding CO 45 on Your EOB

When you see “CO 45” on your Explanation of Benefits, “CO” stands for “Contractual Obligation.” This means the amount is not your responsibility. The “45” refers to “Charge exceeds fee schedule/maximum allowable or contracted amount.” This indicates your provider billed more than your insurer’s agreed-upon rate for a service.

The insurance company pays only up to its established fee schedule. Any amount billed above this contracted rate is typically considered a write-off. For example, if a provider charges $200 for a service but your insurer’s contracted rate is $150, the $50 difference would be indicated by CO 45. This difference is not payable by the patient, as it represents the provider’s contractual agreement with the insurer.

Common Reasons for CO 45

A CO 45 code often appears when the healthcare provider is out-of-network for your plan. Out-of-network providers may bill above the amount your insurance company deems allowable. The insurer then applies CO 45 to the portion exceeding their usual, customary, and reasonable (UCR) rate.

Sometimes, even with in-network providers, CO 45 can appear if they accidentally bill higher than their agreed-upon contract rate. It can also signify a service was not covered by your plan’s benefits, or the insurer considered it medically unnecessary. In most of these instances, the amount associated with CO 45 is adjusted by the provider and becomes a “write-off,” meaning they agree not to collect that sum from you.

What to Do When You See CO 45

When you encounter a CO 45 on your EOB, review the document to ensure the service, dates, and provider match your personal records. Understand your insurance policy details, particularly regarding in-network and out-of-network benefits and what services are covered. This initial review helps confirm the EOB’s accuracy.

Next, contact your healthcare provider’s billing department to confirm the CO 45 amount is a contractual write-off and not your financial responsibility. They can clarify the specifics of the charge and confirm you owe nothing for that portion. If clarification is still needed after speaking with the provider, contact your insurance company directly for further explanation.