Common drivers: NCCI bundling edit includes the denied code inside the primary procedure's payment; missing modifier 59 or X modifier for a genuinely separate service; or an add-on code submitted without its required primary code.
- NCCI bundling edit includes the denied code inside the primary procedure's payment; missing modifier 59 or X modifier for a genuinely separate service; or an add-on code submitted without its required primary code.
- Look up the denied code pair in the NCCI (National Correct Coding Initiative) edit table.
- Check the modifier indicator: a '0' means the codes can never be billed together - post the adjustment.
- A '1' means modifier 59 (or X modifiers XS, XE, XP, XU) can separate them - only if documentation supports a distinct site, session, or procedure.
- If a valid modifier applies, resubmit.
- Verify the NCCI modifier indicator: '0' means unbundling is never allowed; '1' means a modifier works if the service was separate.
- If the indicator is '1' and modifier was omitted, file a corrected claim over a narrative appeal.
- If a modifier was appended and still denied, appeal with documentation of the distinct site, session, or location.
- For payer-specific edits more restrictive than NCCI, request the rationale.
- Load the current-quarter CMS NCCI edit table into your claim scrubber and update it quarterly when CMS publishes a new release.
- Train coders to apply modifier 59 or X modifiers only when the record genuinely documents a distinct service; reflexive use to bypass edits creates compliance risk.
- Run a monthly report of CARC 97 denials by code pair; for recurring distinct-service pairs, create a modifier-use protocol.
What CARC 97 Actually Means
Claim Adjustment Reason Code (CARC) 97 is a bundling denial. The payer is telling you that one of the procedures on your claim is considered part of another procedure that was already paid, either on the same claim or on a prior claim. The payment for the comprehensive procedure is considered to include the payment for the component procedure.
This is one of the most misunderstood denial codes in billing, because sometimes the payer is correct and sometimes they're not. Knowing the difference is what determines whether you write it off or fight it.
When the Denial Is Correct
Bundling rules are defined by NCCI (National Correct Coding Initiative) edits. When a procedure is on the NCCI edit list as a component of another procedure, the payer is right to bundle it. NCCI is a Medicare/Medicaid rule set; most commercial payers adopt it, but many also layer on their own proprietary edits. Common examples:
- Billing a surgical approach code separately from the primary surgical procedure
- Billing an E/M visit on the same day as a procedure without a separately identifiable reason
- Billing a component code when the comprehensive code was already paid
In these cases, the denial is correct. Write it off to the appropriate contractual adjustment code and move on.
One important note on the E/M example: if there WAS a separately identifiable reason for the visit, the correct override is modifier 25 on the E/M code, not modifier 59. Modifier 59 and the X modifiers apply to procedure-to-procedure edits.
When the Denial Is Wrong, and Recoverable
CARC 97 is worth fighting when the two procedures are genuinely distinct services that happened to occur on the same date or during the same encounter. The key question: were the services performed at separate sites, in separate sessions, or on separate injuries/anatomical locations?
If yes, modifier -59 (or the X-modifiers: XE, XS, XP, XU) exists precisely to unbundle services that were legitimately separate. The modifier tells the payer: "I know these codes normally bundle, but they don't in this specific case because the services were distinct."
How to Appeal a CARC 97 Denial
A CARC 97 appeal with modifier -59 will fail without the documentation to back it up. Payers have become much more aggressive about requesting operative notes, progress notes, and session records when -59 is used. Your appeal needs:
- Confirm the NCCI edit. Look up the two codes in the NCCI edit table. If there is a modifier indicator of "1," the edit can be overridden with a modifier. If the indicator is "0," it cannot be overridden; the bundling is absolute. If the indicator is "9," the edit is no longer active and no modifier is needed.
- Add the appropriate modifier to the Column Two (component) code. Use -59 or the more specific X-modifier (XE for separate encounter, XS for separate structure, XP for separate practitioner, XU for unusual non-overlapping service). For E/M-with-procedure bundling, use modifier 25 on the E/M instead.
- Submit with documentation. Include the clinical notes that show the distinct service, separate operative reports, different anatomical sites clearly identified, or documentation of separate sessions.
- Write a cover letter explaining why the services are not bundled in this specific case, citing the NCCI modifier indicator and your supporting documentation.
How to Prevent It
- Run NCCI edits as part of your pre-submission claims scrubber; most clearinghouses offer this
- When two codes are NCCI-related, review the encounter documentation before submission to determine if -59 is warranted
- Train coders to distinguish comprehensive from component codes in your specialty's most common procedure combinations
- Track your CARC 97 denials by procedure code pair. You'll find the same combinations appearing repeatedly, which tells you exactly where to build a claim review step.
Search the full CARC/RARC database
Every denial code includes what it means, why it happens, how to fix it, how to appeal it, and how to prevent it from coming back.
Search the EDI LabRelated Resources
CARC 97 denials are often addressed with the Bundling & Modifier Appeal Template, available in the ROI platform's appeal template library.