How to Appeal a Bundling Denial (CARC 97)

Not every CARC 97 denial should be appealed — but when two services on the same claim were genuinely separate and distinct, you have a real case. The key is understanding when bundling is clinically appropriate and when it is not, and then assembling the documentation to prove your position.

Check the CCI Edit First

Before writing a single word of an appeal, look up the two codes in the CMS Correct Coding Initiative (CCI) edit table. You need to know one thing: what is the modifier indicator for this code pair?

• Modifier indicator "1": The bundling edit CAN be overridden with an appropriate modifier. Your appeal is viable — continue.
• Modifier indicator "0": The bundling edit CANNOT be overridden by any modifier. This is an absolute bundle. Do not appeal — the denial is correct. Write it off.

CCI edits are searchable at the CMS website under the Correct Coding Initiative section. If your practice management system includes a CCI checker, use it.

Choosing the Right Modifier

When the modifier indicator is "1," you have modifier options. Modifier -59 is the general unbundling modifier, but CMS has defined four more specific X-modifiers that are preferred when they apply:

Modifier	When to Use
-XE	Separate encounter — services performed during a separate patient encounter on the same date
-XS	Separate structure — services performed on a separate organ or anatomical structure
-XP	Separate practitioner — services performed by a different practitioner
-XU	Unusual non-overlapping service — the service does not overlap with the usual components of the primary procedure
-59	Use when none of the X-modifiers precisely apply but the services are genuinely distinct

Using the most specific modifier strengthens your appeal. A payer who sees -XS with anatomical documentation is more likely to approve than a generic -59 without specifics.

Documentation Required

The modifier alone will not win the appeal — the documentation has to back it up. For each X-modifier, here is what you need:

• -XE (separate encounter): Two separate progress notes or encounter records showing distinct patient encounters — different times, different clinical purposes
• -XS (separate structure): Operative report or clinical notes clearly identifying the different anatomical locations — "right knee" and "left shoulder," for example
• -XP (separate practitioner): Documentation of the different rendering providers for each service
• -59/-XU: Clinical notes explaining why the component service goes beyond the usual components of the primary procedure

Writing the Appeal

1. State the claim, date of service, the two codes at issue, and the CCI edit modifier indicator (confirming it is "1")
2. Identify the modifier you are applying and why it applies to this specific clinical situation
3. Cite the supporting documentation you are attaching — be specific about what each document shows
4. Request that the claim be reprocessed with the modifier applied