137Denial Code (CARC)Active
CO 137 Denial Code: Regulatory Surcharge Fixes
Code 137 indicates that the payer has adjusted the claim due to regulatory surcharges, assessments, allowances, or health-related taxes. This means that the amount deducted from your claim is related to specific regulatory costs imposed by governmental or health authorities.
Who Pays: Group Code Liability
For code 137, the adjustment typically falls under the CO (Contractual Obligation) group code, meaning the provider must write off the amount and cannot bill the patient for this surcharge or tax.
Why Claims Get Code 137
- The payer applied a mandatory state or federal health-related tax to the claim.
- A regulatory assessment was deducted as required by law.
- The claim included a surcharge mandated by healthcare regulations.
- Adjustments were made due to allowances required by governmental policies.
How to Fix & Resubmit
- Review the payer's explanation of benefits for details on the regulatory surcharge or tax applied.
- Verify whether the adjustment aligns with known state or federal regulations.
- If unclear, contact the payer to confirm the nature and accuracy of the surcharge.
- Document the adjustment as a write-off in your billing system under contractual obligations.
- Ensure the patient is not billed for the amount adjusted under code 137.
Corrected Claim or Appeal?
Typically, code 137 adjustments are legitimate contractual obligations that do not warrant an appeal. No corrected claim is needed unless the surcharge was applied in error, in which case contact the payer for clarification.
Preventing Future 137 Denials
- Stay informed about current regulatory surcharges and health-related taxes applicable to your services.
- Regularly update your billing system with changes in state or federal healthcare regulations.
- Maintain open communication with payers to understand any upcoming regulatory adjustments.
- Educate billing staff on identifying and processing regulatory surcharges appropriately.