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253
CO - Contractual ObligationPayment Adjustment
Denial Code CO-253: Sequestration Reduction
What Does Code 253 Mean?
Sequestration - reduction in federal payment. Automatic across-the-board reduction in Medicare payments required by federal law.
Group Code CO (Contractual Obligation): The provider has agreed to accept the payer's determination. The patient is generally not responsible for this amount.
Why Does This Happen?
Federal sequestration (currently 2% for Medicare claims).
How to Resolve It
- 1This is a standard Medicare reduction - no appeal available
- 2Adjust the expected reimbursement accordingly
- 3Cannot be billed to the patient