CO-1 Denial Code: Deductible Amount (When the Group Code Is CO)

CO-1 is Claim Adjustment Reason Code 1 with group code CO. CARC 1 means “Deductible Amount.” Most remits show that amount as PR-1, because a deductible is usually patient responsibility. A CO-1 line is rarer: the payer coded the same deductible reason under Contractual Obligation, which CMS treats as a provider write-off that is not billed to the patient. Many people search for “co 1 denial code”, and that is the phrase this page answers. (Primary sources: X12 Claim Adjustment Reason Codes · CMS Claims Processing Manual, Ch. 22, §60.1 · our PR-1, PR-2, PR-3 guide)

Quick answer: Read the group code first. If the remit says PR-1, bill secondary or the patient under your financial policy. If it says CO-1, do not bill the patient for that line. Confirm whether the plan waived or absorbed the deductible under contract, whether the group code is a payer mistake that should be PR-1, or whether CARC 281 (deductible waived per contractual agreement) should have been used instead.

Part of our denial codes library. Written by Manikandan, a revenue cycle management specialist with more than 10 years of US medical billing experience. Last reviewed: 13 October 2026. Official code wording is quoted word for word from X12; Medicare rules link to their CMS source.

CO-1 denial code description (official X12 wording)

X12 Claim Adjustment Reason Code 1, verbatim:

“Deductible Amount”

Source: X12 Claim Adjustment Reason Codes, checked 13 October 2026. Start: 01/01/1995. No later “Last Modified” date is listed for code 1.

The CARC is 1. The group code decides who owns the dollars. PR-1 is the everyday pattern. CO-1 uses the same reason text with group CO.

What CO-1 means in plain English

• The payer applied (or identified) a deductible amount on the claim or line.
• Because the group is CO, CMS’s group-code rule treats the amount as a contractual obligation, generally a provider write-off, not a patient balance.
• CO-1 is not a medical necessity denial and not a coding rejection. The service may have paid, paid partially, or been fully adjusted into cost-sharing and contractual amounts.
• The everyday patient-billable version of the same CARC is PR-1.
• Related waived-deductible coding: X12 CARC 281 reads “Deductible waived per contractual agreement. Use only with Group Code CO.” If the plan truly waived the deductible, 281 with CO is the clearer X12 pair than CO-1.

CO-1 vs PR-1, CO-45, CARC 281 and lookalikes

Code	Official X12 idea	What it tells you
PR-1	Deductible Amount (group PR)	Patient (or secondary) owes the deductible — PR-1 guide
CO-1	Deductible Amount (group CO)	Same CARC, but contractual write-off — do not bill the patient
281	Deductible waived per contractual agreement (CO only)	Cleaner code when the deductible was waived by contract
45	Charge exceeds fee schedule / contracted amount	Pricing cut (often next to PR-1/PR-2) — CO-45
66	Blood Deductible	Separate blood deductible CARC
109	Not covered by this payer; send to correct payer	Wrong payer — not a deductible — CO-109

Before this page existed, WordPress’s 404 guess sent /denial-codes/co-1/ to CO-109. CO-109 is a wrong-payer problem. CO-1 is a deductible reason code. They are not the same.

Group code matrix for CARC 1

Group + 1	Who carries the amount	Typical next step
PR-1	Patient / insured (billable after secondary)	Post to patient or bill secondary; see PR-1 / PR-2 / PR-3
CO-1	Provider (write-off under the contract)	Post contractual adjustment; do not statement the patient
OA-1	Other adjustment	Read remarks; confirm it is not a mis-grouped PR

CMS Ch. 22 §60.1 says CO adjustments are “generally… considered a write off for the provider and are not billed to the patient.” PR is for amounts that “may be billed to the patient or insured” and “would typically be used for deductible and copay adjustments.” That is why PR-1 is the expected pair for a true patient deductible, and CO-1 needs a second look.

When you actually see group code CO on a deductible

Common situations billers report (always confirm on your remit and contract):

1. Contractual waiver or absorption. The plan or network agreement says the provider cannot collect that deductible (for example a promotional waiver, ACO shared-savings rule, or “provider absorbs cost-sharing” clause). CARC 281 is the preferred X12 code when the deductible was waived; some payers still emit CO-1.
2. Payer grouping quirk. The adjudication engine applied CARC 1 but stamped group CO by mistake. Compare to the EOB narrative and the patient’s benefit printout.
3. Secondary / wrap products. A secondary plan reports the primary’s deductible math under CO while it pays or writes off its own share.
4. Not the same as unpaid patient deductible. If the patient still owes the deductible under the benefit booklet, the remit should usually show PR-1, not CO-1.

Where CO-1 shows up in the 835

CLP*PCN77881*1*220.00*100.00*40.00*12*CLAIM445566~
SVC*HC:99213*220.00*100.00**1~
CAS*CO*45*80.00~
CAS*CO*1*40.00~
AMT*B6*140.00~

• Line paid $100.
• CO-45 took $80 as the charge-above-allowed write-off.
• CASCO1*$40 took $40 as a deductible coded under CO (provider write-off on this remit).
• If the same $40 were patient-owed, you would expect CASPR1*40.00 instead.

Illustrative only. Real remits vary by payer and may add a remark code.

How to fix CO-1: decision path

1. Confirm the CAS segment. Group code, reason 1, and dollar amount. Screenshot or save the 835/EOB.
2. Compare to the patient’s benefits. Has the annual deductible been met? What does the portal or eligibility response show for remaining deductible?
3. If the contract truly waives or absorbs the deductible, post CO-1 (or CO-281 if that is what the payer sent) as a contractual write-off. Do not bill the patient.
4. If the patient still owes the deductible per the benefit booklet and EOB narrative, the group code is likely wrong. Call or portal-message provider services and ask them to reprocess with PR-1 (or send a corrected secondary if that is the issue).
5. If CARC 281 fits better (deductible waived per contractual agreement), ask the payer whether 281 should replace CO-1 so your posting rules stay clean.
6. Check secondary coverage. Even with PR-1, bill Medicare supplemental or commercial secondary before the patient. With CO-1, there is usually nothing patient-billable on that line.
7. Never rebrand CO as PR in your PMS just to force a statement balance. Fix the remit or document the contractual write-off.
8. Train posters that “deductible” in the reason text does not always mean “bill the patient” — the group code decides.

Medicare, commercial and Medicaid notes

Medicare (Original). Part B deductibles are normally reported as PR-1. CMS set the 2026 Part B deductible at $283 for all Part B beneficiaries (CMS 2026 fact sheet; MLN MM14279). A Medicare FFS remit showing CO-1 instead of PR-1 is uncommon; treat it as a signal to verify the remittance before posting a patient balance. Blood deductible uses CARC 66, not 1.

Commercial. Read the contract and the EOB. Some rental networks and single-case agreements absorb member cost-sharing; those dollars often land in CO. Match the amount to the agreement before you write it off or fight it.

Medicaid. Cost-sharing rules vary by state. If the remit shows CO on a deductible-like amount, confirm whether state policy forbids collecting that amount from the member.

Worked example (illustrative)

A commercial patient has a $500 remaining deductible. Allowed amount on an office visit is $140. The remit pays $0 and shows CASCO1*140.00.

Prevention checklist

• [ ] Always read group code + CARC + amount together before posting.
• [ ] Default mental model: deductible → expect PR-1; investigate CO-1.
• [ ] Keep the benefit booklet / portal screenshot with the account when you dispute the group code.
• [ ] Map PMS posting rules so CO-1 never auto-transfers to patient AR.
• [ ] Know PR-1 / PR-2 / PR-3 for the patient-billable twins.
• [ ] Do not confuse CO-1 with CO-109 (wrong payer) or CO-45 (charge above allowed).
• [ ] Use the CARC and RARC guide for staff training.

Related denial codes

• PR-1 / PR-2 / PR-3: patient-responsibility deductible, coinsurance and copay.
• CO-2: coinsurance amount with group CO.
• CO-3: co-payment amount with group CO.
• CO-45: charge above fee schedule / contracted amount.
• CO-109: not covered by this payer; send to the correct payer.
• CARC and RARC guide.

Key takeaways

CARC 1 means deductible amount. PR-1 is the usual patient-billable form. CO-1 uses the same reason under Contractual Obligation, so you generally write it off, not bill the patient — unless you get the payer to correct the group code to PR.

FAQ

Quick facts

Item	Value
X12 code	1
X12 start	01/01/1995
Official wording	Deductible Amount
Usual group for patient deductible	PR
This page’s group focus	CO
Patient-billable twin	PR-1
Last reviewed	13 October 2026

Sources

• X12, Claim Adjustment Reason Codes (CARC 1, 2, 3, 45, 66, 109, 281). CARC 1 Start 01/01/1995. Accessed 13 Oct 2026.
• CMS, Medicare Claims Processing Manual (IOM 100-04), Ch. 22, §60.1 Group Codes. Accessed 13 Oct 2026.
• CMS, 2026 Medicare Parts A & B Premiums and Deductibles. Part B deductible $283. Accessed 13 Oct 2026.
• Medical Billing 101, PR-1 / PR-2 / PR-3 guide.

Code wording and Medicare rules on this page were checked on 13 October 2026 against X12 and CMS sources.

Last reviewed: 13 October 2026 · This page is educational and doesn’t replace payer-specific contracts or benefit booklets.