CO P27 denial code

Claim adjustment reason code P27. Often reported as CO P27 or OA P27.

Denied under auto liability rules

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 P27 means

The auto insurer denied payment based on liability coverage regulations or policies.

Only auto insurers use it, on medical claims under an auto policy. It relates to liability coverage, which pays for injuries the policyholder caused to others, rather than first party PIP or medical payments.

The remittance may identify the policy or rule involved. Liability claims often settle later, so other coverage may need to pay first.

Group codes seen with P27

On a remittance, P27 comes after a group code. These are the ones it is most often reported with:

• CO P27 (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.
• OA P27 (Other Adjustment): Used for adjustments that are neither the provider's contractual write-off nor the patient's share. It often appears with coordination of benefits, for example when another payer already paid.

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

• Fault was not accepted by the policyholder's insurer.
• The injured person is not covered under the liability policy.
• Liability coverage does not pay providers directly under the policy or state rules.

What to do next

1. Ask the adjuster for the reason and the claim number.
2. Bill the patient's own auto or health coverage as the next payer.
3. Track the liability claim for a later settlement, following state rules on liens.

Related codes

• P28 (reason code) Adjusted under auto liability rules
• P29 (reason code) Auto liability fee schedule adjustment
• P21 (reason code) Denied under auto PIP or MPC rules