CO 262 denial code

Claim adjustment reason code 262. Often reported as CO 262.

Drug delivery cost adjustment

Unofficial reference. This is our own plain-English explanation, not the official code text. Payer rules differ. Verify with the payer and the official X12 code list. AlphaPrefix is not affiliated with X12, CMS or any payer. Data last updated Nov 11, 2026.

What 262 means

The payer adjusted a pharmaceutical claim for the cost of delivering the drug, which is only used on pharmacy claims.

This code belongs to a group of pharmacy codes that explain parts of the price on a drug claim. Here the adjustment relates to delivery charges for getting the medication to the patient or site of care.

It is limited to pharmaceutical claims. If you see it on a professional or facility claim for a non drug service, ask the payer why.

Group codes seen with 262

On a remittance, 262 comes after a group code. These are the ones it is most often reported with:

• CO 262 (Contractual Obligation): The provider's side of the ledger. The reduction comes from the payer contract or a rule the provider has to follow, and the patient normally cannot be billed for it.

The payer chooses the group code for each adjustment, so the same reason code can appear with another group code on your remittance. Read the two together. More about group codes.

Common causes

• The pharmacy billed a delivery charge that the plan prices differently or does not pay separately.
• The plan's pharmacy contract sets how delivery costs are paid.
• Delivery was billed for a drug or setting where the plan does not allow it.

What to do next

1. Compare the adjustment with the pharmacy contract terms for delivery.
2. Confirm the delivery charge was billed with the right qualifier and amount.
3. Contact the pharmacy benefit manager if the adjustment does not match the contract.

Related codes

• 263 (reason code) Drug shipping cost adjustment
• 264 (reason code) Drug postage cost adjustment
• 265 (reason code) Drug administrative cost adjustment