Eligibility-driven denials: the CARC codes and how to prevent them.
When an eligibility problem makes it all the way through to a submitted claim, the denial that comes back carries a specific Claim Adjustment Reason Code, or CARC, telling you exactly why. Two codes account for most eligibility-driven denials. Neither responds well to an appeal, and understanding why is the key to handling this denial category correctly.
Key takeaways
- CO-27 means the coverage had already ended. "Expenses incurred after coverage terminated" — the service date fell after the policy's term date.
- CO-31 means the payer can't match the patient to the policy. "Patient cannot be identified as our insured" — a data mismatch or coverage that was never active.
- These are not coding denials. The service usually genuinely wasn't covered, which is a different problem than a service that was covered but miscoded.
- Prevention beats appeal here. The fact pattern behind an eligibility denial is fixed at the date of service; almost nothing after that changes it.
CO-27: expenses incurred after coverage terminated
CARC CO-27 is the payer telling you the date of service fell after the patient's coverage had already ended. This is one of the most literal denial codes in the entire CARC set — it isn't ambiguous about the reason, and it isn't a coding issue. Somewhere between when the policy actually terminated and when the claim was submitted, either the termination wasn't caught by an eligibility check, or no eligibility check was run at all, or the check ran against data that hadn't yet reflected a very recent termination.
The root causes worth distinguishing are different enough to need different fixes. A termination that was checkable and simply wasn't checked is a process failure — the practice skipped or delayed verification. A termination that had happened but hadn't yet propagated into the payer's eligibility data at the time of the check is a timing failure — the check was run correctly but too far in advance of the actual visit. A termination the patient knew about and didn't disclose is a different problem still, closer to the coordination-of-benefits and coverage-gap scenarios covered in our guide to coverage gap scenarios. All three produce the identical CO-27 code on the remittance, which is exactly why the code alone doesn't tell you which fix applies — that requires looking at when the check was actually run relative to the date of service.
CO-31: patient cannot be identified as our insured
CARC CO-31 means the payer's system has no record connecting this patient to the policy the claim was billed against. The most common root cause is a straightforward data mismatch — a transposed digit in the member ID, a name that doesn't match exactly (a maiden name still on file, a missing suffix), or a date of birth entered incorrectly at registration. The second most common cause is a claim billed against a plan the patient was never actually enrolled in at all, which happens when a patient presents an old card, misremembers their plan, or confuses their coverage with a family member's.
Unlike CO-27, a meaningful share of CO-31 denials are correctable rather than reflecting a genuine coverage gap, because a data-entry mismatch is fixable by resubmitting the claim with corrected information rather than by challenging the payer's underlying coverage determination. That makes CO-31 worth a first look at the demographic and member-ID fields on the original claim before assuming the coverage itself was the problem — but it's still, at its core, an eligibility-category denial rather than a coding one, and the fix is a corrected resubmission, not a clinical appeal.
| CARC | Meaning | Typical root cause | First response |
|---|---|---|---|
| CO-27 | Expenses incurred after coverage terminated | Policy ended before the date of service; eligibility check ran against stale data or wasn't run at all | Confirm the actual termination date; if genuinely termed, this is a prevention problem, not an appeal |
| CO-31 | Patient cannot be identified as our insured | Member ID, name, or DOB mismatch; patient never enrolled under the plan presented; card outlived the policy | Re-check demographic fields against the ID card and payer records before assuming coverage never existed |
How an eligibility failure cascades into a denial
The path from a missed eligibility check to a CO-27 or CO-31 on the remittance is short and mostly invisible until the denial arrives. A visit happens without a current, accurate eligibility check, or with one run too far in advance to catch a change that happened afterward. The claim goes out looking completely normal — correctly coded, correctly documented, nothing wrong with the clinical or billing work itself. Weeks later, the remittance comes back with CO-27 or CO-31 attached, and because the claim itself was clean, the denial often gets routed to a coding or billing review first, where staff spend time confirming the codes were right before anyone realizes the actual problem was upstream, at intake, before the visit ever happened.
That misrouting is the hidden cost of eligibility-driven denials: they consume denial-management staff time looking in the wrong place before the real cause — a coverage problem that existed before the claim was ever generated — gets identified. Tagging CO-27 and CO-31 denials specifically for eligibility review, rather than routing them through the general coding-denial queue, shortens that cycle and gets the right root cause identified faster.
Why prevention beats appeal for this denial category
A coding denial and an eligibility denial look similar on paper — both are a payer declining to pay a claim — but the underlying fact pattern is fundamentally different, and that difference dictates the right response. A coding denial usually means the service delivered was covered, but the claim described or documented it incorrectly; a corrected claim, additional documentation, or a formal appeal can fix that, because the underlying fact (this covered service was performed) hasn't changed. An eligibility denial usually means the service, as delivered on that specific date to that specific patient, genuinely was not covered — the coverage simply didn't exist at that moment. No amount of additional documentation changes what the patient's coverage status was on the date of service, because that's a historical fact, not a matter of clinical interpretation.
This is why eligibility denials are treated as prevention problems rather than appeal opportunities in nearly every case. The exception is a genuine payer-side or data error — the coverage was in fact active and the payer's system was simply wrong, which does happen and is worth disputing when you can document it. But the default assumption for a CO-27 or CO-31 denial should be that the underlying determination is correct, and the value is in catching it before the visit rather than contesting it after. Whether a patient can be billed directly when an eligibility failure is confirmed genuine depends on the circumstances and the financial responsibility agreement on file — a question our pillar guide addresses directly. The operational fix, in every case, is the same one this whole guide is built around: catching the failure before the claim is ever generated, which is exactly what our guide to building the verification workflow covers in detail.
Seeing a steady trickle of CO-27 and CO-31 denials?
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Frequently asked questions
What does CARC CO-27 mean?
CO-27 stands for "expenses incurred after coverage terminated." It means the payer's records show the patient's coverage had already ended before the date the service was delivered, so the claim was excluded from payment on that basis rather than for a coding or documentation reason.
What does CARC CO-31 mean?
CO-31 stands for "patient cannot be identified as our insured." It means the payer has no record matching this patient to the policy presented on the claim, which usually traces back to a member ID, name, or date-of-birth mismatch, or to coverage that was never active under that plan in the first place.
Can an eligibility-driven denial be appealed?
Sometimes, but rarely successfully in the way a coding denial can be. A coding denial often reflects a service that was covered but described incorrectly on the claim, which a corrected claim or appeal can fix. An eligibility denial usually reflects a service that, as delivered on that date to that patient, genuinely was not covered, and no amount of additional documentation changes that fact after the visit has already happened. The exception is a genuine payer or data error, which is worth disputing, but the more common and more valuable response is preventing the failure before the visit rather than appealing after it.
Confirm before you rely on this. Payer eligibility systems, transaction formats and turnaround times change. The process information on this page reflects standard industry practice as of August 2026 and is provided for general education — verify current requirements directly with the specific payer before relying on it.