The CO-278 denial code means the plan says your practice or site did not meet a proficiency rule in one of its performance programs. The service may be fine, but the provider record failed the program check. The fix is to find the program in the 835, prove you meet it, and ask the plan to reprocess. (Primary source: X12 Claim Adjustment Reason Codes)
In brief: CARC 278 is a provider-side program code, such as a quality or credential program the plan runs. X12 allows only group codes CO or PI with it. The 835 may name the program in the policy REF segment of loop 2110.
Part of our denial codes library. Written by Manikandan J, CPC, CRCR, who has worked payer program and credentialing denials for imaging and specialty practices. Published 10 November 2026. Last updated: 10 November 2026. Code wording quoted word for word from X12. Read about the author and our editorial policy, or contact us to report an error.
What does denial code CO-278 mean?
Denial code CO-278 means the plan applied a performance program rule and found a proficiency requirement not met. Plans write these programs into provider contracts. CO puts the reduction on you as a contract matter, so the patient cannot be billed for it.
| Field | Value |
|---|---|
| Code | 278 |
| Description | “Performance program proficiency requirements not met. (Use only with Group Codes CO or PI)” |
| Usage | Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present. |
| Start | 07/01/2016 |
| Last modified | 07/01/2017 |
Source: X12 Claim Adjustment Reason Codes, checked 10 November 2026.
Key terms: A CARC is a Claim Adjustment Reason Code that says why a line paid differently than billed. The policy REF is a line-level segment in the 835 where the plan can name the rule it used. CO means contractual obligation, so the provider owns the balance.
Methodology: the code wording is copied from the X12 list, and the group code rules come from the X12 group code list cited below.
CO-278 vs OA-278: what is the difference?
CO-278 is a contract-based cut for a missed program rule. OA-278 is not a valid pairing, because X12 allows CARC 278 only with CO or PI. If a remit shows OA-278, the plan used the wrong group. In practice the real choice is CO-278 versus PI-278.
| Version | What it says | What you do |
|---|---|---|
| CO-278 | Your contract’s program rule was not met | Fix the program record, then ask for reprocessing |
| OA-278 | Not valid for CARC 278 | Ask the plan to correct the group code |
| PI-278 | The plan applied its own program rule outside a contract | Ask for the rule in writing and appeal if it does not apply |
Neither CO-278 nor PI-278 lets you bill the patient.
What kinds of programs trigger CARC 278?
CARC 278 is triggered by plan programs that grade providers, not claims. For example, a plan may require a current accreditation, a training record, or a quality score before it pays a service type. Each plan writes its own program, so the REF segment and the contract tell you which one applied.
Proficiency rules also exist in law. For example, labs must pass proficiency testing under CLIA (42 CFR part 493, subpart H). A plan program is separate from those rules, even when it checks similar things.
Example scenario (fictional names), part 1
CO-278 Denial Example: What Happened
Tomas Reyes is the billing lead at Lakeshore Imaging Center. Dr. Hannah Cole read a brain MRI without and with contrast, 70553, for a patient with migraine, G43.909 (entered as G43909). The claim went to a fictional commercial plan that runs an advanced imaging quality program.
The 835 paid nothing on the line. It showed CAS*CO*278 and the remark N130, “Consult plan benefit documents/guidelines for information about restrictions for this service.” A REF segment named the imaging program. Tomas knew the scanner was accredited.
So why did the program check fail? Keep reading, or jump to how it was resolved. Keep reading, or jump to how the CO-278 denial was resolved.
How do I fix a CO-278 denial?
To fix a CO-278 denial, find which program failed and update the plan’s record, not the claim. Read the REF segment in loop 2110 first. Then compare the program rules with your current proof, such as an accreditation certificate. Once the plan updates its file, ask it to reprocess the claims.
- Read the REF segment. Note the program or policy ID the plan sent.
- Pull the program rules. Use the contract or the plan’s provider manual.
- Check your proof. Match dates on certificates, training or scores.
- Send the update. Use the plan’s credentialing or program channel.
- Ask for reprocessing. List every affected claim, or appeal with the proof.
Claim form note
No claim form visual is shown here. CO-278 is a provider program issue. The claim’s codes and boxes were correct, so there is no CMS-1500 box or UB-04 form locator to fix.
Example scenario (fictional names), part 2
How the CO-278 Denial Was Resolved
Tomas called the plan’s program line with the REF value. The plan’s file showed the MRI accreditation expiring two months earlier. The site had renewed on time, but nobody sent the new certificate to this plan.
- He uploaded the renewed certificate through the plan’s provider portal.
- He listed the 14 MRI claims denied since the old date.
- He asked for a reprocessing project, not 14 single appeals.
Outcome: the plan updated its file and reprocessed the claims. Tomas added certificate renewals to the credentialing calendar for every contracted plan.
Names and details are illustrative; no real patient data.
Names and details are illustrative; no real patient data.
Can I bill the patient for a CO-278 denial?
No, you cannot bill the patient for a CO-278 denial. CO means the contract makes the provider responsible for the reduced amount. The same holds for PI-278. Fix the program record and get the claims reprocessed instead.
How do I prevent CO-278 denials?
You prevent CO-278 denials by tracking each plan’s program rules like credentialing dates. Keep a list of which plans run which programs. Then send renewals to every plan, not just Medicare.
- Store accreditation and training expiry dates in one calendar.
- Send renewals to each plan’s program contact before the old date ends.
- Run a monthly ERA report for CARC 278 lines, such as by plan and site.
Related codes
| Code | Meaning |
|---|---|
| CO-245 | Provider performance program withhold |
| CO-272 | Coverage or program guidelines not met |
| CO-16 | Claim lacks information needed for adjudication |
FAQ
What does CO-278 mean?
A plan performance program says a proficiency requirement was not met.
Which group codes can CARC 278 use?
Only CO or PI. OA-278 and PR-278 are not valid.
Where does the 835 name the program?
Look for the policy REF segment in loop 2110, if the plan sent it.
Is CO-278 the same as CO-245?
No. CARC 245 is a performance program withhold. CARC 278 is a failed proficiency rule.
Should I send a corrected claim for CO-278?
Usually not. Fix the program record, then ask the plan to reprocess.
Sources
How we checked: the CARC 278 quote and usage note were matched word for word with the X12 CARC list on 10 November 2026, and N130 with the X12 RARC list.
- X12, Claim Adjustment Reason Codes (CARC 278, 245). Accessed 10 Nov 2026.
- X12, Remittance Advice Remark Codes (N130). Accessed 10 Nov 2026.
- X12, Claim Adjustment Group Codes. Accessed 10 Nov 2026.
- eCFR, 42 CFR part 493 subpart H (proficiency testing). Accessed 10 Nov 2026.
Last updated: 10 November 2026 · Educational content; not legal advice.