Medicare Advantage vs. Original Medicare Billing: How to Avoid CO-24 Denials
- Soendeep Kaur
- 3 minutes ago
- 4 min read
In medical billing, seeing that a Medicare beneficiary has “Active Part A and Part B” coverage can give a false sense of security — especially when you’re dealing with professional services under Part B (like podiatry visits). But what happens when that patient is actually enrolled through a Medicare Advantage (MA) plan? The rules change, and the payer changes.
What Is a Medicare Advantage Plan?
An MA plan (sometimes called Part C) is a Medicare-approved plan offered by a private insurer that covers Medicare Parts A & B (and often Part D) in a bundled fashion. From a billing standpoint, this means:
The enrollee still technically has Part A & B coverage, but the private plan is responsible for claims, not the traditional Medicare fee-for-service system.
The plan may have different rules, networks, out-of-pocket costs, and billing requirements compared to Original Medicare.
The Common Pitfall: Billing the Wrong Payer
Here’s what often happens:
You check eligibility and see Part A & B are active → you assume you bill Medicare.
You submit the claim to Medicare (via your MAC) and receive a denial such as CO-24 (“Charges are covered under capitation agreement/managed care plan”).
After investigation you find the eligibility screen noted a private entity and an MA Bill Option Code of “C” (which means the MA plan handles the claim).
Time is wasted, accounts receivable grows, and you may need to resubmit or appeal.
What to Look For — Your MA Eligibility Checklist When you verify patient coverage, make sure you check:
The insurance card: Does it list a private MA plan name (e.g., Alignment Health Plan)?
The eligibility screen under your MAC or payer:
Look for “Bill Option Code: C” / “OPT Code: C” = MA plan is responsible.
A line saying “Contact following entity for eligibility or benefit information” with a private plan listed.
Whether you (provider) are in-network with that MA plan or if out-of-network benefits apply. MA plan rules may differ from Original Medicare.
Whether any additional authorization or special billing rules apply (since MA plans may have their own protocols).
Billing the MA Plan: How It Differs
You typically do not send the claim to traditional Medicare if the eligibility screen shows the MA plan is responsible.
Use the payer ID, billing address, and rules for the MA plan (found on the back of the card or the plan’s provider portal).
Network status matters: Even if the patient’s card shows Medicare, the MA plan may require you to be in-network or may reimburse at a different rate if you are out-of-network.
Documentation, coding, and submission deadlines still matter (all MA plans must comply with CMS rules)
Keep the denial from Medicare (e.g., CO-24) in your records, as this can help demonstrate that you followed the process correctly if asked.
Practical Example: Podiatry Visit Let’s say you’re billing a podiatrist service under Part B for a patient. On the eligibility tool you see:
“Medicare Part A Active 01/01/2025 – 12/31/2025”
“Medicare Part B Active 01/01/2025 – 12/31/2025”
Under “Contact following entity for eligibility or benefit information”:
Plan: PPO
Plan Name: Alignment Health My Choice
Bill Option Code: C
Entity Name: Alignment Health Plan
A phone number listedIn that situation, you don’t submit the claim to Medicare. Instead, you bill Alignment Health Plan (the MA plan) because the Bill Option Code = C means the MA plan is responsible. You may receive a denial from Medicare first (CO-24) if you mistakenly billed them.
Why It Matters for Your Practice
Improves cash flow: You avoid lengthy denial/resubmission cycles and get paid faster.
Reduces A/R aging: Correct payer means fewer re-work items.
Enhances accuracy: Ensures you’re working from the correct payer rules (network, authorizations, etc) rather than assuming Original Medicare.
Protects compliance: You’re following the correct billing pathway and avoid incorrect submissions.
Key Tips for Your Team
Train front-office staff and billers: Make sure they recognize the “Bill Option Code: C” and “Contact entity” lines in eligibility tools.
Create an intake checklist: Every Medicare beneficiary should have their plan verified, including whether they’re on an MA plan.
Document everything: Save eligibility screen prints, payer info, and denial codes (like CO-24) to track and explain billing decisions.
Stay current: MA plan rules vary and may change yearly — always check the payer’s provider portal for updates.
Communicate with the provider: If you’re out-of-network for the MA plan, let the provider know so they can decide whether to accept the visit under those terms or refer elsewhere.
Conclusion
Billing for beneficiaries enrolled in MA plans can feel tricky — especially when the eligibility tools show “Active Part A & B” as if nothing has changed. But the key is recognizing when the MA plan (not Medicare) is the payer. By using the eligibility cues (e.g., Bill Option Code “C”) and verifying the insurance card, you can ensure your claims go to the correct payer, reduce denials, and keep your practice’s revenue cycle running smoothly.
If you’d like a downloadable one-page checklist or a team training tip sheet on “Medicare vs Medicare Advantage billing rules”, we’d be happy to share — just reach out!
