The CO-294 denial code means the payer sent the payment to an attorney instead of to you. The service was processed, but your account shows zero. Find out which attorney holds the funds, then request your share in writing, using any letter of protection or lien on file. (Primary source: X12 Claim Adjustment Reason Codes)
In brief: CARC 294 is a payee notice, common in injury cases. The payer paid, but the money went to the patient’s lawyer. With CO-294, do not rebill the payer; contact the law office with your itemized bill.
Part of our denial codes library. Written by Manikandan J, CPC, CRCR, who has chased attorney-held payments for orthopedic and physical therapy practices. Published 14 November 2026. Last updated: 14 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-294 mean?
Denial code CO-294 means the payer issued the payment to the patient’s attorney. Reason code 294 most often follows an accident, where a lawyer manages the medical bills. Your line shows no payment, but the money exists.
| Field | Value |
|---|---|
| Code | 294 |
| Description | “Payment made to attorney.” |
| Group codes | No X12 group restriction; CO is the most common |
| Start | 11/01/2017 |
Source: X12 Claim Adjustment Reason Codes, checked 14 November 2026.
Methodology: the code wording is copied from the X12 list, and the claim form steps follow the NUCC instructions cited below.
Key terms: A letter of protection is a provider’s agreement to wait for payment from a case settlement. A lien is a legal claim on settlement funds. CO is the contractual obligation group code.
CO-294 vs OA-294: what is the difference?
CO-294 books the zero as a contract matter, because the payer settled the bill by paying the attorney. OA-294 shows the same payment with no liability stated. Both versions mean the same thing for you: the money went to a law office, so start there.
| Version | What it tells you | First step |
|---|---|---|
| CO-294 | Payment went to the attorney under the payer’s process | Ask the law office for the payment date and amount |
| OA-294 | Same payment, no liability stated | Ask the law office for the payment date and amount |
This differs from CO-293, where the payee was an employer.
Why did the payer pay an attorney?
The payer pays an attorney when the claim sits inside an injury case that the lawyer is handling. Auto accidents and liability claims are the usual sources. The payer, or another insurer in the case, may release medical benefits to the law office to cover bills.
Sometimes a liability insurer is already tracking the case. For example, remark code N725 reads “A liability insurer has reported having ongoing responsibility for medical services (ORM) for this diagnosis.” That tells you a second insurer may be responsible, so confirm the case details.
Example scenario (fictional names), part 1
CO-294 Denial Example: What Happened
Reggie Alvarez works the front office and billing for Summit Spine and Rehab. Dr. Priya Raman treated a patient after a rear-end collision. Reggie billed 99204 with S134XXA and checked the auto accident box.
The fictional plan answered with an 835 showing CAS*CO*294 on 99204, zero paid, and remark code N725.
The patient said the lawyer was handling everything. Who had the payment, and who owed Summit Spine? Keep reading, or jump to how it was resolved. Keep reading, or jump to how the CO-294 denial was resolved.
How do I fix a CO-294 denial?
To fix a CO-294 denial, locate the funds, then claim your payment from the attorney. Ask the payer for the payment date and amount. Send the law office an itemized bill with your lien or letter of protection. Keep your own file clean so you can follow up.
- Pull the 835. Note the payer claim number, amount and any remark code.
- Call the payer. Ask for the payment date, amount and the name of the payee.
- Contact the law office. Send an itemized bill and your letter of protection or lien.
- Set a follow-up. Track the case status and the request date.
- Post the payment. Apply it to the claim when the funds arrive.
Example scenario (fictional names), part 2
How the CO-294 Denial Was Resolved
Reggie called the payer and learned that the medical benefit for the visit had been released to the patient’s law firm. He then phoned the firm and asked for its billing contact.
Fix: he sent an itemized bill, the signed letter of protection and the visit note, and asked for payment of the 99204 amount. He logged the request date and set a 30-day follow-up.
Outcome: the law firm paid the clinic from the released funds. Reggie now asks every injury patient for the law office contact at check-in.
Names and details are illustrative; no real patient data.
Names and details are illustrative; no real patient data.
Can I bill the patient for CO-294?
No, do not bill the patient first. The payer already paid, so the patient does not owe that amount. Ask the attorney for the funds, as your letter of protection says. For example, if you bill the patient and the attorney also pays, you would have to refund one of them. The NUCC instructions explain how accident details appear on the claim.
Should I rebill the payer after CO-294?
No, rebilling the payer is the wrong step. The claim was processed and paid. A second claim for the same service can return as an exact duplicate, such as CO-18. Work with the attorney, and use the payer only to confirm payment details.
Related codes
| Code | Meaning |
|---|---|
| CO-293 | Payment made to employer |
| CO-22 | Care may be covered by another payer per coordination of benefits |
| CO-18 | Exact duplicate claim or service |
| CO-45 | Charge exceeds the fee schedule or maximum allowable amount |
FAQ
What does CO-294 mean?
The payer sent the payment to an attorney instead of to the billing provider.
Do I need to rebill a CO-294 claim?
No. The service was paid. Contact the attorney for the funds.
Is CO-294 the same as CO-293?
No. CO-293 means the payment went to an employer.
Which group code comes with CARC 294?
X12 sets no restriction. CO is the common choice on payee notices.
Does the patient owe a CO-294 amount?
No. The payer already paid it, to the attorney.
Sources
How we checked: the CARC 294 quote was matched word for word with the X12 CARC list on 14 November 2026, and N725 with the X12 RARC list.
- X12, Claim Adjustment Reason Codes (CARC 294, 293, 22). Accessed 14 Nov 2026.
- X12, Remittance Advice Remark Codes (N725). Accessed 14 Nov 2026.
- NUCC, 1500 claim form instructions. Accessed 14 Nov 2026.
- HealthCare.gov, coordination of benefits. Accessed 14 Nov 2026.
- CMS, Medicare Secondary Payer overview. Accessed 14 Nov 2026.
Last updated: 14 November 2026 · Educational content; not legal advice.