Appealing a Medicare CO-45 Denial
A Medicare CO-45 denial (charge exceeds fee schedule) is one of the most common claim rejections behavioral health therapists face. This guide explains exactly what caused the denial and the most effective appeal strategy for behavioral health practices.
What this denial means
Your billed charge is higher than the maximum the payer allows for this service under the fee schedule. This is a contractual reduction — it is not a denial of the service, just a reduction to the contracted rate. No appeal is required unless you believe the fee schedule was applied incorrectly.
Your appeal strategy
Confirm the billed code was correct. If you believe the fee schedule rate was applied in error (wrong contract, wrong table year, out-of-network rate applied to an in-network claim), request the fee schedule documentation from the payer and compare against your contract. File a payment dispute with the contract reference if there is a discrepancy.
What Medicare requires
60 calendar days (Level-1 appeal)
180 days from Level-1 denial
Traditional Medicare (Parts A/B) follows the five-level appeals process: Redetermination → Reconsideration (QIC) → ALJ → Medicare Appeals Council → Federal Court. Medicare Advantage (Part C) provides an analogous five-level process under 42 CFR § 422.560 et seq. Federal MHPAEA does NOT apply to Medicare; do not raise a 29 CFR § 2590.712 parity argument on a Medicare or Medicare Advantage denial. Base the appeal on Medicare coverage criteria and the applicable LCD/NCD.
Generate your Medicare CO-45 appeal letter
Therapists get 5 free letters every month. Appealing your own denial? It's $19 per letter, one-time, no subscription. No credit card needed to start.
Generate my appeal letter →Frequently asked questions
How long does Medicare have to respond to a CO-45 appeal?
Under federal regulations, Medicare must respond to a Level-1 internal appeal within 60 calendar days. State insurance law, including your state's prompt-payment statute, does not apply to this federal program — confirm the current response-window rules directly with the program administrator before filing. If you receive an adverse determination, you typically have 180 calendar days from the date of the Level-1 denial to request external review. Send the appeal via certified mail or through the payer's portal and keep documentation of the submission date.
Does MHPAEA apply to CO-45 denials?
No. Medicare is not subject to the federal Mental Health Parity and Addiction Equity Act (MHPAEA) at all, so a parity argument does not apply to a CO-45 denial — or any denial — from this payer. Base your appeal on Medicare's own coverage rules and appeal process. Traditional Medicare (Parts A/B) follows the five-level appeals process: Redetermination → Reconsideration (QIC) → ALJ → Medicare Appeals Council → Federal Court. Medicare Advantage (Part C) provides an analogous five-level process under 42 CFR § 422.560 et seq. Federal MHPAEA does NOT apply to Medicare; do not raise a 29 CFR § 2590.712 parity argument on a Medicare or Medicare Advantage denial. Base the appeal on Medicare coverage criteria and the applicable LCD/NCD.
Can I appeal a CO-45 denial more than once?
Yes. Most payers, including Medicare, allow at least two levels of internal appeal (Level-1 and Level-2 or "expedited" review). Keep copies of every appeal, submission confirmation, and payer response. After exhausting the plan's internal reconsideration, Medicare Advantage appeals follow the federal ladder under 42 CFR Part 422 Subpart M: plan reconsideration → independent review entity → Administrative Law Judge (ALJ) → Medicare Appeals Council → federal court. Traditional Medicare appeals follow 42 CFR Part 405 Subpart I. Your state insurance commissioner has no authority over Medicare appeals.
What documentation do I need to appeal a CO-45 denial from Medicare?
At minimum: the original Explanation of Benefits (EOB) or Remittance Advice (RA) showing the CO-45 denial, the original claim details (CPT code, date of service, NPI, charge amount), and any clinical documentation supporting medical necessity. Submit everything in one packet with a cover letter citing the specific denial code, the date of service, and the claim number.