CO-5 means the payer thinks the service could not have been done where the claim says it was. Usually the place of service code is wrong or does not match the CPT. Fix the code that is wrong and send a corrected claim.
The official wording
The X12 Claim Adjustment Reason Code list defines 5 as: "The procedure code/type of bill is inconsistent with the place of service."
The letters in front are the group code. CO means contractual obligation (the provider absorbs it), PR means patient responsibility, and OA is other adjustment. The same reason code can come with different group codes, so always read both.
What CO-5 is telling you
Every professional claim has a place of service (POS) code, for example 11 for office, 21 for inpatient hospital, 22 for outpatient hospital, and 02 or 10 for telehealth. Some CPT codes can only be billed in certain places. When the two do not match, the payer denies with CO-5.
Our place of service code list shows each POS code and whether it is paid at the facility or non-facility rate.
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Common causes
- An office visit code billed with a hospital POS, or a hospital visit code billed with POS 11.
- A telehealth visit billed with POS 11 instead of 02 or 10, or the other way around, depending on the payer's rules.
- The POS in the practice management system copied from the last visit instead of the current one.
- A facility type of bill on an institutional claim that does not fit the revenue or procedure code.
How to fix it
- Confirm where the service really happened from the note and the schedule.
- Correct the POS or the CPT code, whichever is wrong.
- Send a corrected claim with frequency code 7 and the original claim number. See our corrected claim guide for each payer's deadline.
- Check the payer's telehealth policy if the visit was virtual, because payers differ on POS 02, POS 10 and modifier 95.
How to prevent it
- Set the POS by appointment type in your scheduling system, not by hand.
- Add a scrubber edit that flags hospital visit codes with POS 11 and office codes with hospital POS.
- Keep a short list of each major payer's telehealth POS rules at the billing desk.
One claim with the wrong place of service
A provider sees a patient in the hospital on day two of an admission. The billing system copied the POS from the provider's last office visit.
| Item | On the claim | Problem |
|---|---|---|
| CPT code | 99232 (subsequent hospital care) | Hospital inpatient code |
| Place of service | 11 (office) | Does not match an inpatient code |
| Remittance | CO-5 | Denied |
| Fix | Change POS to 21 (inpatient hospital), send corrected claim | Paid |
Common code and place of service pairs
| Service type | Code family | Right POS |
|---|---|---|
| Office visit | 99202 to 99215 | 11 (office) |
| Hospital inpatient visit | 99221 to 99233 | 21 (inpatient hospital) |
| Observation or hospital outpatient | Hospital visit codes | 22 (on campus outpatient) or 19 (off campus) |
| Emergency department visit | 99281 to 99285 | 23 (emergency room) |
| Nursing facility visit | 99304 to 99316 | 31 (SNF) or 32 (nursing facility) |
| Telehealth, patient at home | Telehealth-eligible codes | 10 for Medicare. Commercial rules vary. |
| Telehealth, patient not at home | Telehealth-eligible codes | 02 for Medicare. Commercial rules vary. |
Full list with facility and non-facility rates: our place of service code list.
Remark code that often comes with CO-5
| Remark code | Official wording | What to do |
|---|---|---|
| M77 | "Missing/incomplete/invalid/inappropriate place of service." | Check where the service really happened and fix the POS on the claim. |
CO-5 checklist
- ☐ The POS matches where the patient was, based on the note.
- ☐ The CPT code family fits that POS.
- ☐ Telehealth claims follow the payer's POS and modifier rules.
- ☐ The POS is set by appointment type, not copied from the last visit.
Questions people ask about CO-5
Can I bill the patient for CO-5?
No. CO-5 is a contractual adjustment for a billing error. Correct the claim and resubmit.
Should I appeal CO-5?
Only if the claim was correct. Most CO-5 denials are fixed faster with a corrected claim than with an appeal.
What POS do I use for telehealth?
For Medicare, POS 10 when the patient is at home and POS 02 when they are somewhere else. Commercial payers differ, and some still want POS 11 with modifier 95, so check each payer's policy.
Can CO-5 happen on a hospital claim (UB-04)?
Yes. On institutional claims, the type of bill takes the place of the POS. A type of bill that does not fit the revenue or procedure code can also get CO-5.
How fast can I fix CO-5?
Usually the same day. Correct the POS or CPT and send a corrected claim with frequency code 7.
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All denial code guides
PR-1 · PR-2 · PR-3 · CO-4 · CO-5 · CO-11 · CO-15 · CO-16 · OA-18 · CO-22 · OA-23 · CO-24 · CO-26 · CO-27 · CO-29 · CO-31 · CO-45 · CO-49 · CO-50 · CO-59 · PR-96 · CO-97 · CO-109 · CO-119 · CO-129 · CO-140 · CO-146 · CO-151 · CO-167 · CO-170 · CO-181 · CO-185 · CO-197 · CO-198 · PR-204 · CO-234 · CO-236 · CO-242 · CO-252 · CO-253 · CO-288 · CO-A1 · CO-B7 · MA130 · N130 · N23 · N290
Timely filing limits by payer: Cigna timely filing limit · HealthSpring timely filing limit · Aetna timely filing limit · UnitedHealthcare timely filing limit · Humana timely filing limit · corrected claim timely filing limits
Sources: X12 Claim Adjustment Reason Code list (5), read October 26, 2026; CMS Medicare guidance where Medicare rules are mentioned; CMS Place of Service Code Set; X12 RARC list (M77), read October 27, 2026. Last reviewed October 27, 2026. General information, not coding or legal advice. Payer rules differ, so check the remark code and the payer's own policy.