CO · Contractual ObligationCARC 23

Denial Code CO-23

Q: What does CO-23 mean?

CO-23 is a Contractual Obligation (CO) denial: "The impact of prior payer(s) adjudication including payments and/or adjustments." This line reflects what a prior payer already paid or adjusted, factored into how this payer calculated its share — a coordination-of-benefits accounting entry, not a denial of the service itself.

Q: Is CO-23 the patient's responsibility or a provider write-off?

CO-23 carries the CO group code (Contractual Obligation): Provider/contractual responsibility — not billable to the patient while denied. A CO adjustment is the provider's responsibility, not the patient's: balance-billing the patient for a CO amount is a contract (and often compliance) violation. But CO does not automatically mean “write it off.” When the cause is fixable — missing information (CO-16), a modifier problem (CO-4), or NCCI bundling (CO-97) — you correct and resubmit, or appeal with documentation. You only truly write the amount off when it is a final contractual adjustment, such as the fee-schedule difference on CO-45.

The impact of prior payer(s) adjudication including payments and/or adjustments.

Source: X12 Claim Adjustment Reason Codes (CARC) & Group Codes. Maintained by the D3rx Clinical Billing Team.

What CO-23 means

This line reflects what a prior payer already paid or adjusted, factored into how this payer calculated its share — a coordination-of-benefits accounting entry, not a denial of the service itself.

Why CO-23 happens

A secondary payer is accounting for the primary payer's payment/adjustments before paying its portion
A standard coordination-of-benefits calculation between two payers
The primary remittance reduced the allowed amount this payer recognizes
Medicare-secondary or Medigap crossover math reflecting the primary's action

What to do when you get CO-23

1Confirm the CO-23 amount matches what the prior payer actually paid/adjusted on its EOB
2Verify this payer calculated its payment off the correct prior allowed amount
3Reconcile any remaining patient balance after this payer pays
4If the math is wrong, resubmit the prior payer's EOB and confirm COB is set up correctly

Got this denial right now?

Ask D3 whether to appeal or correct CO-23

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CO-23 can go either way depending on the claim. Ask D3 tells you whether to appeal, correct, or just confirm status — free.

CO group code: who absorbs the charge

Contractual Obligation — Provider/contractual responsibility — not billable to the patient while denied.

A CO adjustment is the provider's responsibility, not the patient's: balance-billing the patient for a CO amount is a contract (and often compliance) violation. But CO does not automatically mean “write it off.” When the cause is fixable — missing information (CO-16), a modifier problem (CO-4), or NCCI bundling (CO-97) — you correct and resubmit, or appeal with documentation. You only truly write the amount off when it is a final contractual adjustment, such as the fee-schedule difference on CO-45.

Appeal, correct, or write off CO-23?

CO-23 is a coordination adjustment, not a service denial, so it rarely needs an appeal: the dollars reflect a prior payer's adjudication moving the math along. Act only when this payer misread the prior payment — then re-send the prior EOB and request reprocessing, which is a correction rather than a formal appeal.

Timing & deadlines

Secondary/COB claims must still be filed within this payer's timely-filing window (often measured from the prior EOB date; commonly ~90-180 days commercial, 12 months Medicare). Don't delay submitting while reconciling.

Example

A claim crosses from a commercial primary to a secondary payer, and the secondary's remittance reflects a CO-23 adjustment for the primary's payment so it can compute its share. If the amounts reconcile to the primary EOB, no provider action is needed.

Prevent CO-23 going forward

Attach the primary EOB/ERA to every secondary claim
Keep COB order accurate so crossovers calculate correctly
Reconcile secondary payments against the primary remittance line by line
Confirm automatic crossover is active for Medicare/Medigap where applicable

Code families most affected

Services for patients with secondary coverage
Medicare-secondary and Medigap crossover claims
Coordination-of-benefits scenarios

Related codes

Denial codes you'll often see alongside CO-23

OA-23 CO-22 CO-45

Payer notes

Per X12, CARC 23 is intended for use with Group Code OA (see OA-23) — it is an informational coordination adjustment, not a contractual write-off you owe or a patient balance. Seeing it under CO is unusual; treat it as the prior-payer-impact accounting it describes and reconcile against the prior EOB.

Not sure how to work CO-23?

Ask D3 whether CO-23 should be appealed, corrected, or simply confirmed — free, backed by CMS, Medicare, and major-payer data.

Ask D3 about CO-23 Ask D3 about CO-23 All denial codes

Medical billing disclaimer

CARC/RARC definitions are the standardized X12 set; group-code semantics follow the X12 Claim Adjustment Group Code standard. Filing and appeal windows vary by payer — the standard anchors shown (Medicare redetermination 120 days from the remittance; Medicare timely filing 12 months from date of service; most commercial payers ~90-180 days) are general references, not a guarantee for any specific plan. Always confirm the rule in the payer's provider manual before acting. D3rx is not responsible for claim outcomes.