CO-245 means the payer kept back part of the payment under a provider performance program. It is not a denial of the service. The claim was approved, then a slice of the allowed amount was held under your contract. Whether you see that money again depends on how the program settles. (Primary source: X12 Claim Adjustment Reason Codes)
In brief: CARC 245 reads “Provider performance program withhold.” Do not rebill or correct the claim. Check the withhold rate in your contract, post the amount to a withhold receivable instead of a write-off, and watch for a later settlement. Payers often mark a returned withhold with remark N552.
Part of our denial codes library. Written by Manikandan J, CPC, CRCR, who has posted and reconciled value-based contract payments for health plans and physician groups. Published 24 October 2026. Last updated: 24 October 2026. Code wording quoted word for word from X12.
CO-245 in plain words
| Field | Value |
|---|---|
| Code | 245 |
| Description | “Provider performance program withhold.” |
| Usual group | CO (contractual) |
| Start | 09/30/2012 |
Source: X12 Claim Adjustment Reason Codes, checked 24 October 2026.
A withhold is a share of each payment that a plan holds until the end of a performance period. The contract sets the share and the targets. Targets are often quality, cost or utilization goals. Medicare runs its own value-based programs, and many commercial and Medicare Advantage contracts copy the idea.
CO means the patient is not billed for it. The withheld amount is between you and the plan.
Why a withhold looks like a denial
The remit shows a lower payment and a CAS adjustment, so posting rules often treat it as a write-off. That hides money the group may earn back. Typical mistakes include:
- Posting it as a contractual write-off. The amount leaves A/R, so no one tracks the settlement.
- Rebilling the claim. A corrected claim cannot change a withhold, and it can trigger a duplicate edit.
- Billing the patient. Group code CO rules this out.
- Not checking the rate. For example, a plan may apply a withhold to a service line the contract excludes.
Example scenario (fictional names), part 1
CO-245 Denial Example: What Happened
Kenji Mori manages A/R for Lakeshore Family Physicians, a fictional primary care group. After a new Medicare Advantage contract started, every visit paid a little less than the fee schedule.
The 835 showed CAS*CO*245 on each line. The posting rules had sent all of it to contractual write-off, and nothing was tracking it.
Was the money gone, or was it only on hold? Keep reading, or jump to how the CO-245 denial was resolved.
How to work CO-245
- Read the contract. Find the withhold percentage, which services it covers, the performance period and the settlement date.
- Check the math. Recompute the withhold on a sample of lines. Compare it with the allowed amount, not the billed charge.
- Post it separately. Move CO-245 amounts to a withhold receivable or a tracked adjustment code, not a final write-off.
- Watch the scorecards. Ask the plan for the program reports that decide how much is returned.
- Match the settlement. When the plan pays it back, it may use remark N552: “Payment adjusted to reverse a previous withhold/bonus amount.” Apply that payment against the tracked balance.
If the rate is wrong, raise a payment dispute under the contract. Our EOB reading guide shows where adjustment amounts appear on a paper remit.
Example scenario (fictional names), part 2
How the CO-245 Denial Was Resolved
Kenji pulled the contract. It set a withhold on professional services, returnable in part or in full after the annual quality review. One lab line had also been withheld even though the contract left labs out.
Fix: He created a withhold receivable adjustment code, moved the CO-245 amounts into it, and disputed the lab withhold with the plan’s provider relations team.
Outcome: The lab amounts were reprocessed. At the year-end settlement, the returned withhold posted with N552 and cleared the receivable.
Names and details are illustrative; no real patient data.
CO-245 compared with nearby payment codes
| Code | What it means | Recoverable? |
|---|---|---|
| CO-245 | Performance withhold | Often, at settlement |
| CO-45 | Charge above the fee schedule | No |
| CO-253 | Sequestration reduction | No |
| CO-237 | Legislated or regulatory penalty | Only by appeal |
FAQ
Is CO-245 a denial?
No. The service was approved, and part of the payment is being held under a performance program in your contract.
Should I send a corrected claim for CO-245?
No. A withhold is a contract term, so changing the claim will not release it.
Can I bill the patient for a CO-245 amount?
No. Group code CO keeps it between the provider and the plan.
Will the withhold come back?
It depends on the program results and the contract. Track it until the settlement date.
What remark shows a returned withhold?
Payers often use N552 when they reverse a previous withhold or bonus.
Sources
How we checked: each code quote on this page was matched word for word with the X12 CARC and RARC lists on 24 October 2026.
- X12, Claim Adjustment Reason Codes (CARC 245). Accessed 24 Oct 2026.
- X12, Remittance Advice Remark Codes (N552). Accessed 24 Oct 2026.
- CMS, Value-based programs. Accessed 24 Oct 2026.
Last updated: 24 October 2026 ยท Educational content; not legal advice.
Related denial codes
- CO-246: Non-Payable Reporting Code
- CO-253: Sequestration Reduction in Federal Payment
- CO-237: Legislated or Regulatory Penalty
- CO-235: Sales Tax on the Remit
- CO-256: Service Not Payable Per Contract
- CO-223: When a Law Sets the Payment
- CO-222: Provider Cap Explained
- CO-212: Administrative Surcharges Not Covered