A CO-97 denial means the payer determined that one of the procedures billed is a component of another procedure also billed on the same claim, under CMS's National Correct Coding Initiative (NCCI) edits. The service wasn't denied because it wasn't needed — it was denied because the coding indicates it's typically included in the payment for the primary service.
What NCCI edits are
CMS publishes the NCCI as two edit tables: the Procedure-to-Procedure (PTP) edits and the Medically Unlikely Edits (MUEs). PTP edits define pairs of CPT codes that, in most clinical circumstances, shouldn't be reported together — because the work of one procedure is typically included in the other. The tables are updated quarterly.
Each PTP edit carries an edit indicator — either 0 or 1:
0
No modifier allowed
The bundling is absolute. No modifier will override the edit. Billing the secondary code separately is not permitted under any circumstances for Medicare. The appeal path here is to challenge whether the edit was applied correctly — for example, whether the billed codes actually trigger the edit listed.
1
Modifier may be used
A modifier — 59 or one of the X-modifiers — can override the edit when the clinical circumstances genuinely support separate billing. This is the most common CO-97 scenario with an appealable path.
The NCCI edit tables are available at: cms.gov — NCCI edits ↗
The modifiers that override bundling
When the edit indicator is 1, a modifier tells the payer that the clinical circumstances warranted separate billing. Using one without genuine clinical justification is fraudulent billing — the modifier has to match what actually happened.
Distinct Procedural Service
The broadest of the unbundling modifiers. Used when a procedure or service is distinct or independent from other services performed on the same day — because it was performed at a different session, site, organ system, incision/excision, or lesion. CMS began discouraging the use of 59 in favor of the X-modifiers in 2015, but many commercial payers still accept it.
Use when: When the procedures were genuinely performed on separate anatomic areas, at separate sessions, or for unrelated diagnoses, and none of the X-modifiers fits more precisely.
Separate Encounter
A more specific subset of modifier 59: services performed during a separate encounter on the same date of service.
Use when: When the two procedures were billed on the same date but performed at different clinical sessions — for example, a patient seen in the office in the morning and in a procedure suite in the afternoon.
Separate Structure
Services performed on a separate organ system or structure. Introduced in 2015 alongside XE, XP, and XU to bring more specificity to what had been a widely overused modifier 59.
Use when: When two procedures involved anatomically distinct structures — for example, a surgery on the right shoulder and a separate procedure on the left knee during the same operative session.
Separate Practitioner
Services rendered by a different practitioner than the one who performed the other billed service.
Use when: In group practices or facilities where a second provider independently performed a service billed on the same claim.
Unusual Non-Overlapping Service
The service is not overlapping with the usual components of the main service — used when none of the other X-modifiers fits and the overlap is genuinely unusual.
Use when: As a last resort when the service doesn't fit XE, XS, or XP but is genuinely separate from the primary procedure in a way that isn't captured by modifier 59 alone.
Building the appeal
A CO-97 appeal takes a different form than a medical necessity appeal. The argument is not clinical judgment against the payer's criteria — it's a factual claim about what was actually performed.
- 01Look up the NCCI edit.Identify the specific code pair that triggered the CO-97. Check the edit indicator. If it's 0, a modifier appeal is not available — the argument shifts to whether the edit was applied to the correct codes.
- 02Determine which modifier applies. The modifier has to match what actually happened clinically. XE for separate encounters. XS for separate structures. XP for separate practitioners. Review the operative or procedure note to identify the specific clinical basis.
- 03Resubmit the corrected claim and file a written appeal. Attach the operative note or procedure documentation that substantiates the modifier. The appeal letter should cite the NCCI edit indicator (1), the modifier used, the clinical basis for separate reporting, and the specific documentation enclosed.
- 04For Medicare: reference the NCCI Policy Manual.CMS publishes a Policy Manual that explains the rationale behind the edit categories. Citing the relevant chapter when the clinical circumstances clearly fit one of the manual's exceptions strengthens the position.
When CO-97 is not reversible
Some CO-97 denials are correct. If the edit indicator is 0, the services are bundled by definition for Medicare purposes — no modifier changes that. Similarly, if the two procedures were truly part of the same procedure (same site, same session, same operative field), applying an unbundling modifier isn't appropriate and doing so creates compliance exposure. Be honest about what happened.
Build the CO-97 appeal with the right modifier argument.
Upload the denied EOB and Merits identifies the NCCI edit indicator, determines the applicable modifier, and drafts the cited appeal — ready in about a minute. $9 a letter. No account.