CO 281 denial code

Claim adjustment reason code 281. Often reported as CO 281.

Deductible waived by contract

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 281 means

The deductible that would normally apply was waived under the provider's contract, so the patient is not charged it.

Some contracts waive the patient's deductible for certain services or providers. This code shows the amount that would have been deductible and says it was waived by agreement.

It is only used with group code CO, so the amount is not the patient's to pay. It is typically handled as a contractual adjustment.

Group codes seen with 281

On a remittance, 281 comes after a group code. These are the ones it is most often reported with:

• CO 281 (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 contract waives the deductible for that service type or program.
• The plan has a preventive or incentive arrangement that waives deductible amounts.
• The provider agreed to accept payment without the deductible.

What to do next

1. Confirm the waiver in the contract terms for the service.
2. Post the amount as a contractual adjustment rather than patient responsibility.
3. Check that the patient was not charged the deductible at the time of service, and refund it if they were.

Related codes

• 1 (reason code) Amount applied to the deductible
• 45 (reason code) Charge exceeds the allowed amount