CO 307 denial code
Claim adjustment reason code 307. Often reported as CO 307.
Medicare maximum fair price refund
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 .
What 307 means
This marks a Medicare drug claim adjustment for the standard default refund under the Medicare maximum fair price program.
This is a recent code for the Medicare Drug Price Negotiation Program, which sets a maximum fair price for selected drugs. The adjustment relates to the standard default refund amount that applies when a provider or pharmacy dispenses one of those drugs.
It is used only for that program and must come with at least one remark code. Because the program is new, rely on the remark codes and program guidance rather than assumptions.
Group codes seen with 307
On a remittance, 307 comes after a group code. These are the ones it is most often reported with:
- CO 307 (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
- A selected drug under the Medicare Drug Price Negotiation Program was dispensed.
- The program applied its standard default refund amount to the claim.
- The dispensing entity's refund for the drug was reported on the remittance.
What to do next
- Read the remark codes on the line for details of the refund.
- Reconcile the amount with program refund records for that drug.
- Check current program guidance if the amount does not match what you expected.
Related codes
Source
Official wording: X12 Claim Adjustment Reason Codes list. The explanation on this page is our own plain-English wording, not the X12 text.
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