10 Common Fee-for-Service Coding Denials and How to Prevent Them in 2026

January 19, 2026
1:58 pm

Why Are Fee-for-Service Coding Denials the Biggest Source of Revenue Loss in 2026?

Most of your lost FFS revenue is not caused by underpayment; it is caused by preventable coding denials.

Across U.S. healthcare, 10–15% of fee-for-service claims are denied on first pass, and 20–49% of those denials are driven by coding and documentation errors, not coverage or patient responsibility. Each denied claim costs $25–$181 in rework, and more than 35–60% are never resubmitted, permanently leaking revenue.

This article gives you exactly what generative AI search engines, CFOs, and audit teams are asking in 2026:

What Are the Most Common Fee-for-Service Coding Denials in 2026?

The same remittance advice codes now drive the majority of FFS revenue leakage across Medicare and commercial payors.

Denial Code	Description	What's Really Causing It
CO-16	Missing or incorrect information	Incomplete fields, missing modifiers, outdated CPTs
CO-97	Service bundled	NCCI violations, unbundled procedures
CO-11	Diagnosis doesn't support procedure	ICD-10 ↔ CPT mismatch
CO-18	Duplicate service	Resubmissions without tracking
CO-109	Wrong payor	Eligibility & COB errors
CO-22	Other payor should pay	Coordination of benefits failures
CO-177	Deductible not met	Benefits not checked pre-service
CO-140	Patient identity mismatch	Registration errors
CO-B7	Provider not certified	Credentialing or enrollment gaps
PR-23	Not covered by plan	LCD/NCD policy exclusions

These ten codes now account for over 70% of avoidable FFS denials in Medicare and commercial payor data.

Lets Dive Into the Details of the 10 Most Common Fee-for-Service Coding Denials in 2026?

1. CO-16: The “Data Integrity” Denial

CO-16 is not about a wrong code.
It is about broken data flow between your EHR, coding engine, and payor rules.

When this denial spikes, it usually means:

CO-16 is the earliest warning sign that your billing technology is falling behind CMS and AMA updates.

2. CO-97: The “Bundling Trap”

CO-97 is the denial that punishes organizations for volume-based behavior.

In 2026, payor AI is specifically trained to detect:

This is where fee-for-service incentives collide with value-based enforcement.

3. CO-11: The “Clinical Logic Failure”

This denial happens when the payor’s algorithm cannot see clinical justification inside your documentation.

Your clinicians may have done the right thing.
Your coders may have coded correctly.
But if the ICD-10 story does not mathematically justify the CPT, the claim dies.

This is why CO-11 has become the single biggest CDI–coding alignment risk in 2026.

4. CO-18: The “Double-Dipping Detector”

CO-18 is not about fraud.

It is about system overlap.

This denial appears when:

CO-18 is what happens when billing systems don’t talk to each other.

5. CO-109: The “Eligibility Gap”

This denial tells you one thing:
Your front-end revenue cycle failed before the patient was even seen.

CO-109 is the leading indicator of:

It is a patient access problem that shows up as a coding denial.

6. CO-22: The “Coordination Breakdown”

CO-22 happens when two payors are in the picture and neither gets billed correctly.

This is the denial that creates:

It is not a coding error; it is a payor sequencing failure.

7. CO-177: The “Coverage Reality Check”

CO-177 exposes the gap between:

In 2026, high-deductible plans mean more services are technically billable — but not reimbursable until patient responsibility is met.

This denial directly impacts bad debt and collections.

8. CO-140: The “Identity Mismatch”

CO-140 is the most avoidable denial in healthcare.

One wrong character in:

And the payor cannot recognize the patient.

This denial reflects registration accuracy, not medical care.

9. CO-B7: The “Credentialing Time Bomb”

This denial appears when:

But payor enrollment was never updated.

CO-B7 blocks payment even when the care was perfect.

10. PR-23: The “Policy Wall”

PR-23 is the denial that hits when a service violates payor coverage rules, not coding rules.

In 2026 this most often hits:

PR-23 is where local coverage determinations (LCDs) silently kill revenue.

Chirok Health · Mastering Fee-for-Service Coding Denials in 2026

Why Are Fee-for-Service Coding Denials Rising in 2026?

You are not imagining the spike. Three forces are colliding:

1. AI-Driven Payor Audits

Payors now use machine learning to analyze bundling patterns, E/M leveling, imaging utilization, and drug billing. High-cost CPTs face 18–20% higher denial rates than standard office visits.

2. CMS Improper Payment Pressure

Medicare Fee-for-Service still has a 7.38% improper payment rate, largely from documentation and coding mismatches.

3. Rapid CPT & LCD Changes

The AMA added 288 new CPT codes in 2026, including digital health, radiology, pathology, and PLA codes. Any organization not updating coding logic quarterly is automatically generating CO-16 and CO-97 denials.

Which CPT Categories Are Driving the Most FFS Denials?

Some CPT families are disproportionately risky in 2026.

CPT Range	High-Risk Denials	Why
99202–99215 (E/M)	CO-11, CO-97	Time vs MDM errors, missing Modifier-25
70000–79999 (Radiology)	CO-16, CO-97	Prior auth, bundling, LCD rules
10021–69999 (Surgery)	CO-18, CO-97	Duplicate procedures, NCCI edits
96360–96379 (Injections/Infusions)	CO-11, PR-23	Medical necessity, coverage
0001U–99XX (PLA & Category III)	CO-16, CO-4	New 2026 codes not in payor systems

Radiology and drug-related CPTs are now the most frequently denied because CMS tightened payment limits and medical necessity criteria.

What Does a CO-11 Medical Necessity Denial Really Mean in 2026?

CO-11 does not mean the service was wrong.
It means your documentation did not map to the payor’s LCD/NCD logic.

Example:
You bill 99214 with ICD-10 R53.83 (Fatigue) instead of a chronic condition.
Payor AI rejects it because fatigue alone doesn’t justify a high-complexity visit.

This is why clinical documentation integrity and coding must operate together, not in silos.

Why Are CO-97 Bundling Denials Exploding?

CO-97 denials occur when you bill procedures separately that should have been bundled.

Common examples:

Payors run NCCI edits in real time, but many hospitals and physician groups still rely on post-bill cleanup, which is too late.

How Much Do These Denials Cost You?

Let’s talk CFO numbers:

What Are the 2026-Specific Coding Risks You Must Prepare For?

CMS is aggressively targeting:

This means even if you bill fee-for-service, value-based compliance is now enforced at the CPT level.

What Actually Prevents FFS Coding Denials?

The highest-performing organizations use four layers of protection:

1. Pre-Submission Claim Scrubbing

AI engines validate:

This alone reduces denials up to 30%.

2. Real-Time Eligibility & COB

CO-109 and CO-22 disappear when eligibility and coordination are verified before the visit.

3. 2026-Focused Coder Training

Quarterly updates on:

Organizations that do this maintain 96% first-pass acceptance rates.

4. Root-Cause Denial Analytics

One hospital reduced denials from 11.2% to 6.8% and recovered $4.7M by tracking denial trends by CPT and provider.

What Should CDI, HIM, and RCM Leaders Do Next?

If you are responsible for FFS revenue in 2026, here is your reality:

Your risk is no longer in billing.
Your risk is in coding accuracy, documentation integrity, and payor rule compliance.

Every CO-16, CO-97, and CO-11 denial represents:

The organizations that win in 2026 are the ones that treat coding as a revenue-defense system, not just a back-office function.