CO-197, CO-198 and N54: What Authorization Denial Codes Actually Mean

CO-197, CO-198 and N54 all appear on authorization-related claim denials, but they describe different failures. CARC 197 means a required authorization was absent, CARC 198 means it was exceeded, and RARC N54 means the claim does not match what was authorized. The most useful first step is to read the code combination rather than reducing every authorization denial to "no auth."

X12, which maintains the code lists, defines CARC 197 as "Precertification/authorization/notification/pre-treatment absent" and CARC 198 as "Precertification/notification/authorization/pre-treatment exceeded." Remittance Advice Remark Code N54 adds a different piece of information: "Claim information is inconsistent with pre-certified/authorized services." Those distinctions matter because the recovery path can be completely different. One account may truly have no authorization; another may have a valid authorization that covers fewer units than were billed; a third may have an authorization on file that does not match the claim's codes, dates or provider.

Start with the remittance architecture

A remittance advice uses several standard code types together. CMS explains that any line- or claim-level adjustment may carry a Claim Adjustment Group Code, a Claim Adjustment Reason Code (CARC) and a Remittance Advice Remark Code (RARC). Group codes assign financial responsibility for the unpaid balance, CARCs give the overall explanation for the adjustment, and RARCs can add more specific detail. Our guide to reading a remittance advice covers that structure in more depth.

That is why "CO-197" is not a freestanding denial number. CO is the group code for Contractual Obligation and 197 is the reason. For Medicare, CMS states that CO assigns responsibility to the provider and that beneficiaries may be billed only when the PR (Patient Responsibility) group code is used. For other payers, whether the patient can be billed for a CO adjustment generally depends on the provider's contract, which is one more reason to read the full remittance rather than the reason code alone.

The codes themselves are standardized. HIPAA requires health plans to conduct standard electronic transactions using valid standard codes, and the federally adopted CAQH CORE rule on the uniform use of CARCs and RARCs standardizes which group code, CARC and RARC combinations plans use for common denial scenarios, so that each plan is not mapping its own proprietary codes in its own way.

CO-197 means the required pre-service action was absent

CARC 197 is used when a required precertification, authorization, notification or pre-treatment was absent. That should trigger an investigation, not an automatic appeal. Ask whether the service truly required authorization for this patient's product and date of service, whether the requirement belonged to the payer or a delegated reviewer, whether an authorization exists under a different number, and whether the billing or servicing provider was correctly linked to it.

Sometimes "absent" really means "not on the claim." Noridian's guidance for Medicare DME suppliers, for example, lists common causes of a 197 denial (paired there with remark code N210) as a prior authorization tracking number that was not appended to the claim, or a required modifier that was missing. Its fix is to correct the claim and rebill with the 14-byte unique tracking number from the affirmative decision letter, in loop 2300 or 2400 of the electronic claim or item 23 of the paper CMS-1500. Where the prior authorization was non-affirmed, Noridian directs suppliers to a redetermination instead.

If no authorization exists and one was required, the next question is whether the payer permits a retroactive authorization, reconsideration or appeal, and that answer is specific to the payer and product. Resubmitting a corrected claim will not fix a genuinely absent authorization unless the original claim also contained wrong data.

CO-198 means something exceeded the approved parameters

CARC 198 is different: the authorization existed, but the claim went beyond it. The usual questions are whether the billed units exceed the authorized units, whether treatment continued past the authorized date span, whether the number of visits exceeded what was approved, or whether the claim includes a service outside the authorization's scope.

CO-198 is not evidence that authorization was never obtained. Retrieve the authorization and compare its parameters directly with the claim: service codes, units or visits, dates, rendering provider, facility or place of service, and any conditions the payer recorded. Often the remedy is an authorization extension or update for the additional services, not a dispute of the denial.

N54 points to a mismatch

RARC N54 indicates that claim information is inconsistent with the precertified or authorized services. It can be more actionable than a generic authorization denial, because it suggests an authorization may exist but something on the claim does not line up with it. The job becomes reconciliation.

Perhaps the authorization was issued for one CPT code but the procedure was billed under another, the payer approved one rendering provider but the claim names a different one, or a valid authorization covers the right service but the date of service falls outside its effective range. In each case, do not assume the payer was wrong. Determine whether the claim is wrong, the authorization needs to be amended, or the payer failed to match valid information.

What about CO-15?

Many teams still look up "CO-15," but CARC 15 is no longer an active code. Its text was "The authorization number is missing, invalid, or does not apply to the billed services or provider," and X12 lists a stop date of May 1, 2018. X12 does not name a single replacement. If an older reference or internal cheat sheet still routes on CO-15, it is out of date.

Active codes now cover parts of the same ground. RARC M62 reads "Missing/incomplete/invalid treatment authorization code." CARC 39 covers "Services denied at the time authorization/pre-certification was requested," and CARC 243 covers "Services not authorized by network/primary care providers," which replaced the deactivated code 38. The broader lesson is that the code lists change. Medicare contractors apply X12's code updates three times a year, around March 1, July 1 and November 1, and the remark code list alone gained new codes in both the March and July 2026 updates. Check the current X12 list rather than a cheat sheet.

Do not start by appealing

An authorization-related adjustment can come from at least four different problems: the authorization does not exist, it exists but was exceeded, it exists but does not match the claim, or the payer failed to recognize a valid authorization. Those problems need different remedies.

If the claim contains a wrong code or identifier, the remedy may be a corrected claim. If a valid, matching authorization was not applied, a reconsideration or dispute may be appropriate. If the authorization was denied, or the service was provided without a required authorization, the case may need an authorization appeal, a retroactive process or another plan-specific route. The denial code identifies the category of problem; it does not identify the procedural remedy.

Compare three records side by side

The fastest way to work these denials is to compare the claim, the authorization and the remittance together rather than one at a time. From the claim, capture the billed codes, units, dates, rendering provider, billing entity and place of service. From the authorization, capture the approved services, units, dates, provider, facility, authorization number and status. From the remittance, capture the group code, CARC, RARC, the affected line and any payer-specific message.

Then find the mismatch. If every material field aligns and the authorization was valid for the date of service, the provider has a much stronger basis for challenging the adjudication.

Authorization denials are a reconciliation problem

The most valuable distinction is not between code numbers. It is between four underlying states: missing authorization, exceeded authorization, mismatched authorization, and a valid authorization that adjudication did not recognize. A denial workflow should classify each account into one of those states before assigning the next action. That routes claim corrections to billing, authorization changes to the pre-service team, payer processing errors to follow-up, and genuine adverse coverage decisions to the right dispute or appeal process.

SuperDial supports the retrieval side of that work, including claim status and denial follow-up, returning structured payer information with source evidence and an audit trail. The classification itself should still rest on the claim, the authorization and the payer's response.

FAQ

What does denial code CO-197 mean?

CARC 197 means a required precertification, authorization, notification or pre-treatment was absent. The CO group code means the adjustment is a contractual obligation assigned to the provider. The next step depends on whether authorization really was required and whether a valid authorization can be found.

What does CO-198 mean?

CARC 198 means the precertification, notification, authorization or pre-treatment was exceeded. Compare the approved units, visits, dates and services with what was billed.

What does remark code N54 mean?

RARC N54 means the claim information is inconsistent with the services that were pre-certified or authorized. An authorization may exist, but something on the claim does not match it.

Is CO-15 still a valid denial code?

No. X12 deactivated CARC 15 as of May 1, 2018. Related active codes include RARC M62 for missing or invalid authorization numbers and CARC 39 for services denied when authorization was requested.

Should an authorization denial always be appealed?

No. The right response may be a corrected claim, an authorization update, a reconsideration, a retroactive request or a formal appeal, depending on the underlying problem and the payer's rules.

Sources

All retrieved October 6, 2026.

• X12, "Claim Adjustment Reason Codes": https://x12.org/codes/claim-adjustment-reason-codes
• X12, "Remittance Advice Remark Codes": https://x12.org/codes/remittance-advice-remark-codes
• CMS, "Health Care Payment & Remittance Advice" (modified September 10, 2024): https://www.cms.gov/medicare/coding-billing/electronic-billing/health-care-payment-remittance-advice
• CMS, Transmittal R13666, Change Request 14410 (March 25, 2026): https://www.cms.gov/files/document/r13666cp.pdf
• 45 CFR Part 162, Administrative Requirements (including 162.1603, operating rules for health care payment and remittance advice): https://www.ecfr.gov/current/title-45/subtitle-A/subchapter-C/part-162
• CAQH CORE, "Uniform Use of CARCs and RARCs Rule": https://www.caqh.org/hubfs/43908627/drupal/core/Payment-Remittance-CARCs-RARCs-Rule.pdf
• Noridian JD DME, "Reason Code 197 | Remark Code N210" (updated September 12, 2025): https://med.noridianmedicare.com/web/jddme/topics/ra/denial-resolution/n210-197