CO-3 Denial Code: Co-payment Amount (When the Group Code Is CO)

CO-3 is Claim Adjustment Reason Code 3 with group code CO. CARC 3 means “Co-payment Amount.” A copay is a fixed dollar member share (for example $40 for a specialist visit). Remits usually report that as PR-3. CO-3 is the same reason under Contractual Obligation, so those dollars are generally a provider write-off, not a patient balance. Before this page existed, WordPress’s 404 guess sent /denial-codes/co-3/ to CO-307 (Medicare Maximum Fair Price adjustment). That is a different code. Many people search for “co 3 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 · PR-1 / PR-2 / PR-3 · CO-307)

Quick answer: PR-3 = fixed copay the patient (or secondary) may owe. CO-3 = fixed copay reason coded as contractual — do not bill the patient for that line until you confirm a waiver or get the group corrected. Do not treat CO-3 as CO-307 (Maximum Fair Price).

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-3 denial code description (official X12 wording)

X12 Claim Adjustment Reason Code 3, verbatim:

“Co-payment Amount”

Source: X12 Claim Adjustment Reason Codes, checked 13 October 2026. Start: 01/01/1995. No later “Last Modified” date is listed for code 3.

The CARC is 3. Copayment is a flat dollar amount set by the plan, not a percentage (that is coinsurance, CARC 2).

What CO-3 means in plain English

• The payer applied a copay amount to the claim or line.
• Group CO means treat it as a contractual write-off unless you get the remit corrected.
• Group PR (PR-3) means the amount may be billed to the patient or insured after secondary.
• CO-3 is not CO-307. CO-307 is the Medicare Maximum Fair Price standard default refund amount adjustment and requires a remark code.
• CO-3 is not a non-covered denial. The visit usually processed; the adjustment is about the copay dollars.

CO-3 vs PR-3, CO-307, CO-241 and lookalikes

Code	Official X12 idea	What it tells you
PR-3	Co-payment Amount (group PR)	Patient fixed copay — PR-1 / PR-2 / PR-3
CO-3	Co-payment Amount (group CO)	Same CARC, contractual write-off
307	Medicare Maximum Fair Price Standard Default Refund Amount Adjustment (remark required)	Drug-price negotiation adjustment — CO-307
241	Low Income Subsidy (LIS) Co-payment Amount	Separate LIS copay CARC
45	Charge exceeds fee schedule / contracted amount	Pricing cut often on the same remit
1 / 2	Deductible / Coinsurance	Other cost-sharing CARCs — CO-1, CO-2

Slug confusion: co-3 is a prefix of co-307, which is why the old guess redirect opened the Maximum Fair Price page. Always read the full code on the remit.

Group code matrix for CARC 3

Group + 3	Who carries the amount	Typical next step
PR-3	Patient / insured	Collect copay or bill secondary
CO-3	Provider (write-off)	Post contractual adjustment
OA-3	Other adjustment	Read remarks

CMS Ch. 22 §60.1 notes that PR “would typically be used for deductible and copay adjustments.” That is the expected home for a true member copay. CO on a copay needs a contract reason or a correction.

When group code CO appears on a copay

1. Plan or clinic contract waives the copay at the point of service (employer clinic, promotional $0 copay events, certain value-based arrangements).
2. Payer grouping error — ID card still shows a $25 / $40 / $50 copay.
3. Secondary reporting of primary copay under CO.
4. LIS or other special copay programs may use CARC 241 instead of 3; read the code you actually received.

Where CO-3 shows up in the 835

CLP*PCN99001*1*180.00*110.00*40.00*12*CLAIM667788~
SVC*HC:99213*180.00*110.00**1~
CAS*CO*45*30.00~
CAS*CO*3*40.00~
AMT*B6*150.00~

• Allowed $150 (charge $180 − CO-45 $30).
• Plan paid $110.
• CASCO3*$40 is a $40 copay coded under CO.
• Patient-billable twin: CASPR3*40.00.

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

How to fix CO-3: decision path

1. Confirm CASCO3 and the dollar amount. Do not confuse the queue label with CO-307.
2. Check the member ID card and eligibility for the scheduled copay amount.
3. If the contract waives the copay, post CO-3 as a write-off.
4. If the member owes the copay, request reprocessing as PR-3.
5. If the remit is actually about Maximum Fair Price / drug negotiation, you need the CO-307 path and its remark code — not CO-3.
6. Collect front-desk copays carefully. If you already collected $40 and the remit later shows CO-3 (write-off), you may owe the patient a refund under your policy.
7. Bill secondary when the corrected group is PR and a supplemental plan exists.
8. Update posting rules so CO-3 never auto-lands in patient AR.

Medicare, commercial and Medicaid notes

Medicare (Original). Many Part B services use deductible + coinsurance (PR-1 / PR-2) rather than a flat PR-3 copay. Medicare Advantage and commercial plans use fixed copays much more often. A CO-3 on Original Medicare FFS is unusual; verify before posting.

Commercial / MA. Fixed copays are common. Match the remit to the tier (PCP vs specialist vs urgent care). CO-3 with an active member copay on the card is a group-code dispute.

Medicaid. Copays, when they exist, are often small and sometimes non-collectible under state rules. CO-3 may simply mean “do not bill the member.”

Worked example (illustrative)

Specialist copay on the card is $40. Remit pays the line and shows CASCO3*40.00. Front desk already collected $40.

Letter / portal note when the group should be PR-3

[Date]
[Payer] Provider Services
Re: Please reprocess CAS*CO*3 as PR-3 (co-payment)
Patient: [Name]  Member ID: [ID]  Claim: [Claim #]  DOS: [date]

The remittance reports CAS*CO*3 for $[amount]. The member's benefit shows a
$[amount] copay for this service type, and our contract does not waive that
copay. Please reprocess with group code PR and CARC 3 so we may bill secondary
or the member correctly.

Enclosed: remit, ID card copay schedule, eligibility screenshot.
[Name]  [NPI]  [Phone]

Prevention checklist

• [ ] Teach CO-3 ≠ CO-307.
• [ ] Reconcile front-desk copay collections to the remit group code.
• [ ] Expect PR-3 for normal member copays.
• [ ] Investigate CO-3 before patient statements or refunds.
• [ ] Keep links to PR-1 / PR-2 / PR-3 and CO-307.
• [ ] Use the CARC and RARC guide for new billers.

Related denial codes

• PR-1 / PR-2 / PR-3: patient deductible, coinsurance and copay.
• CO-1: deductible amount with group CO.
• CO-2: coinsurance amount with group CO.
• CO-307: Medicare Maximum Fair Price adjustment.
• CO-45: charge above allowed / contracted amount.
• CARC and RARC guide.

Key takeaways

CARC 3 means co-payment amount. PR-3 is the usual patient-billable form. CO-3 is the contractual form — generally a write-off. Do not confuse it with CO-307 Maximum Fair Price.

FAQ

Quick facts

Item	Value
X12 code	3
X12 start	01/01/1995
Official wording	Co-payment Amount
Usual group for patient copay	PR
This page’s group focus	CO
Patient-billable twin	PR-3
Common lookalike	CO-307 (Maximum Fair Price)
Last reviewed	13 October 2026

Sources

• X12, Claim Adjustment Reason Codes (CARC 3, 241, 307, 45). CARC 3 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.
• Medical Billing 101, PR-1 / PR-2 / PR-3 guide.
• Medical Billing 101, CO-307 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.