CO-23 Denial Code: Prior Payer Impact Filed Under Group Code CO

CO-23 is Claim Adjustment Reason Code 23 with group code CO. CARC 23 is the code that reports “the impact of prior payer(s) adjudication including payments and/or adjustments.” X12 adds a usage note: “Use only with Group Code OA.” So a CO-23 line does not follow the X12 wording. The risk is in your posting system. A poster that treats CO as a write-off can subtract the prior payer’s dollars a second time. Many people search for “co 23 denial code”, and that is the phrase this page answers. (Primary sources: X12 Claim Adjustment Reason Codes · X12 Example 07: Coordination of Benefits · CMS Claims Processing Manual, Ch. 22, §60.1)

Quick answer: CO-23 is not a denial and not a new write-off. It is a secondary remit line that carries the prior payer’s payments and adjustments, filed under the wrong group code. Do not auto-adjust it. Match it to the primary remit, post only the new dollars, and ask the payer to correct the group to OA.

Part of our denial codes library. Written by Manikandan, a revenue cycle management specialist with more than 10 years of US medical billing experience. Last reviewed: 16 October 2026. Official code wording is quoted word for word from X12; Medicare rules link to their CMS source.

CO-23 denial code description (official X12 wording)

X12 Claim Adjustment Reason Code 23, verbatim:

“The impact of prior payer(s) adjudication including payments and/or adjustments. (Use only with Group Code OA)”

Source: X12 Claim Adjustment Reason Codes, checked 16 October 2026. Start: 01/01/1995. Last Modified: 09/30/2012.

Other X12 codes carry an exception to their group rule. CARC 18, for example, says “Use only with Group Code OA except where state workers’ compensation regulations requires CO.” CARC 23 has no such exception in the current X12 text. The only listed group is OA.

What CO-23 means in plain English

• The reason is COB reporting. COB is coordination of benefits. The remit is telling you what a prior payer already did on this claim.
• The group is the problem. CO means contractual obligation. CMS says CO adjustments are “generally… considered a write off for the provider and are not billed to the patient.”
• The dollars are not new. The provider already posted the prior payer’s payment and contract reductions. For example, a $240 primary payment and a $110 reduction are already on the account.
• The patient does not owe it. Prior payer impact is not patient responsibility.
• It is a payer reporting issue, not a coverage decision on your claim, such as a medical necessity denial.

CO-23 vs OA-23, PR-22, CO-45 and lookalikes

Code	Official X12 idea	What it tells you
CO-23	Prior payer impact, filed under CO	Off-pattern group. This page
OA-23	Prior payer impact, group OA	The expected pairing. See OA-23
PR-22	Another payer may be primary (group PR)	A COB question, not prior payer math. See PR-22
CO-22	Another payer may be primary (group CO)	See CO-22
CO-45	Charge exceeds fee schedule or contract	Current payer’s own reduction. See CO-45
71	Primary Payer amount (stopped 06/30/2000)	Retired. X12 notes “Use code 23.”

Why the group code changes the posting

X12’s Example 07 explains the job of CARC 23. A secondary claim must account for the full original charge. Items already posted from the prior payer must be identifiable “so that they can be handled appropriately as informational and not be posted to the AR.” Reposting prior payer payments or contractual adjustments “would negatively impact the AR system (i.e., cause negative balances).”

Now add the group code. Under OA, the posting rule is simple: leave the amount alone. Under CO, a system that follows the CMS meaning posts the amount as a provider write-off. If your system does that with a CO-23 amount, it removes dollars that the primary payment and the primary adjustment already removed.

CARC 45 has a matching rule. X12 says a CO-45 or PR-45 amount “must not duplicate provider adjustment amounts (payments and contractual reductions) that have resulted from prior payer(s) adjudication.”

What to rule out when you see CO-23

X12 does not say why a payer files CARC 23 under CO. Check each case on your own remit. These questions narrow it down:

1. Is it a payer reporting error? The reason may be right and the group wrong.
2. Is a special program involved? CARC 18 allows CO for state workers’ compensation rules. The CARC 23 text lists no such exception, so ask the payer what rule it follows.
3. Did your own system change the group? Compare the raw 835 file with what your posting screen shows.
4. Do the same dollars appear twice? Check whether the amount shows at both claim level and line level under different groups.

Where CO-23 shows up in the 835

CLP*PCN44017*2*400.00*30.00*20.00*12*CLAIM990011~
SVC*HC:73721*400.00*30.00**1~
CAS*CO*23*350.00~
CAS*PR*2*20.00~

• The line paid $30.
• CAS*CO*23*350.00 is the prior payer’s payment ($240) plus its contractual reduction ($110), filed under CO.
• CAS*PR*2*20.00 is the coinsurance the patient still owes after both plans.
• The math balances: $350 + $20 + $30 = $400.
• This sample is illustrative only. Real remits vary.

How to fix CO-23: decision path

1. Confirm the CAS segment. Check the group (CO), the reason (23), and the amount. Save the secondary 835.
2. Stop auto-adjusting. Route the line to a review queue. Do not let the system write off the amount.
3. Open the primary remit. Add the primary payment and the primary contractual reductions. Do not include the primary’s patient responsibility.
4. Compare the totals. If the sum matches the CO-23 amount, the line is prior payer impact.
5. Post only new dollars. Post the secondary payment and any new adjustments. Treat the CO-23 amount as informational.
6. Check the balance. After posting, the account should balance to the original charge. A negative balance means the amount was posted twice.
7. Ask the payer to correct the group to OA. Send both remits and the claim number. Ask for a written answer.
8. Never bill the patient for the CO-23 amount.

Medicare, commercial and Medicaid notes

Medicare. CMS lists CO, OA and PR as valid group codes on Medicare remittances. CMS also says CO amounts are generally not billed to the patient. Either way, a CO-23 amount is never patient responsibility.

Commercial. Many commercial payers follow the X12 COB examples. If a payer sends CO-23, ask for its 835 companion guide and compare the rule to the guide.

Medicaid. State programs may have their own companion guides. Check the state guide before you change your posting rule.

Worked example (illustrative)

A $400 MRI claim goes to the primary plan. The primary pays $240 and takes a $110 contract reduction. The secondary remit shows CAS*CO*23*350.00, CAS*PR*2*20.00, and a $30 payment.

Reading it: Consider the totals. The $350 matches the primary’s $240 payment plus its $110 reduction. It is not a new write-off.

What goes wrong: The practice system reads CO as a write-off. It posts a $350 adjustment. The account was already reduced by $350 when the primary posted. The balance drops below zero.

Fix: The biller reverses the extra adjustment. The biller posts the $30 payment, moves the $20 to the patient, and asks the secondary payer to resend the line with group OA.

Second scenario: The totals do not match. The primary remit adds up to $360, but the secondary shows $350. Hold the account and ask both payers to explain the $10 gap.

Prevention checklist

• [ ] Add a rule to flag any CARC 23 line that is not group OA.
• [ ] Do not auto-write-off CO-23 amounts.
• [ ] Reconcile every secondary remit to the primary remit before closing the account.
• [ ] Watch for negative balances on secondary accounts.
• [ ] Keep a short payer list that shows who sends CO-23 and what each payer answered.
• [ ] Keep the CARC and RARC guide handy for staff training.

Related denial codes

• OA-23: the expected group for CARC 23.
• PR-22: another payer may be primary, filed as patient responsibility.
• CO-22: another payer may be primary, filed under CO.
• CO-45: the charge exceeds the fee schedule or contract.
• CARC and RARC guide.

Key takeaways

CO-23 is prior payer impact filed under the wrong group. It is not a new write-off and not patient balance. Do not auto-post it. Match it to the primary remit and ask the payer to send OA.

FAQ

Quick facts

Item	Value
X12 code	23
X12 start	01/01/1995
Last modified	09/30/2012
Official wording	The impact of prior payer(s) adjudication including payments and/or adjustments
X12 group rule	Use only with Group Code OA
Group code on this line	CO (Contractual Obligation)
Last reviewed	16 October 2026

Sources

• X12, Claim Adjustment Reason Codes (CARC 18, 22, 23, 45, 71). CARC 23 Start 01/01/1995; Last Modified 09/30/2012. Accessed 16 Oct 2026.
• X12, Example 07: Coordination of Benefits. Accessed 16 Oct 2026.
• CMS, Medicare Claims Processing Manual (IOM 100-04), Ch. 22, §60.1 Group Codes. Accessed 16 Oct 2026.
• Medical Billing 101, OA-23 guide.

Code wording and Medicare rules on this page were checked on 16 October 2026 against X12 and CMS sources.

Last reviewed: 16 October 2026 · This page is educational and doesn’t replace payer-specific contracts or coding rules.