CO 23 Denial Code – The impact of prior payer(s) adjudication including payments and/or adjustments

As we know when the claims submitted to secondary insurance for balance, secondary insurance will process and allow the claim as per their fee schedule.  Suppose if the primary insurance paid amount is less than secondary insurance allowable amount and primary insurance allowed amount is greater than secondary insurance allowed amount.

In that case secondary insurance will allow the difference between secondary allowable amount and primary paid amount as there net allowable amount and remaining balance they will deny with CO 23 Denial Code – The impact of prior payer(s) adjudication including payments and/or adjustments.

Example 1:

Let us consider patient has Medicare (Primary insurance) and Medicaid (secondary insurance).

Primary Medicare insurance adjudicated as follows:

Total Billed Amount: $120.00

Contractual Adjustment: $20.00

Medicare Allowed: $100.00

Paid Amount: $80.00

Coinsurance Amount: $20.00

Secondary Medicaid Adjudicated as follows:

Medicaid Allowable amount is: $84.00

Medicare paid amount is: ($80.00)

Net Medicaid allowable is: $4.00

Balance $16.00 with denial code CO 23

In the above example, Primary Medicare paid $80.00 and the balance coinsurance $20.00 has been forwarded to secondary Medicaid.

Secondary Medicaid net allowed amount is $4.00 and the balance $16.00 then will deny with CO 23 Denial Code – The impact of prior payer(s) adjudication including payments and/or adjustments. Because Medicaid allowable amount for this service is $84.00, in that primary Medicare insurance already paid is $80.00. The difference between secondary Medicaid allowed amount ($84.00) and primary insurance Medicare paid amount is $4.00(Which will be Net Medicaid allowed amount).

Example 2:

In this example let us assume patient has BCBS (Primary insurance) and Medicare (secondary insurance).

BCBS insurance adjudicates and processes the claim as primary:

Total Billed Amount of the Claim: $220.00

Contractual Adjustment: $80.00

BCBS Allowed: $140.00

BCBS Paid Amount: $122.00

Coinsurance Amount: $18.00

Medicare Adjudicates the claim as below:

Medicare Allowable amount: $134.00

BCBS paid amount for the claim is: ($122.00)

Net Medicare allowable amount is: $12.00

Balance $6.00 stated as CO 23 Denial Code – The impact of prior payer(s) adjudication including payments and/or adjustments.

In the above second example, Primary BCBS insurance allowed amount is $140.00, in that they have paid $122.00 and coinsurance amount is $18.00(Coinsurance amount transferred to secondary Medicare insurance along with primary BCBS EOB).

Secondary Medicare processed and allowed $134.00 as per there fee schedule, in that primary BCBS insurance already paid $122.00. The difference between secondary Medicare insurance allowed amount and primary BCBS insurance paid amount is $12.00(Net secondary Medicare allowed amount) and the balance $6.00 will be denied with denial code CO 23.

What needs to be done when claim denied with CO 23 Denial Code – The impact of prior payer(s) adjudication including payments and/or adjustments:

• Review the insurance screen to ascertain the balance is pending with secondary. If the insurance in question is primary, call the insurance to reprocess the claim.
• If it’s from secondary Insurance, check the fee schedule of secondary to understand the allowable.
• If primary insurance paid is less than secondary insurance allowable and primary insurance allowed amount is greater than secondary insurance allowed amount.
• Then check to see what the net allowed amount of secondary insurance and how they have adjudicated it (Whether net allowed amount is paid or is it applied to patient responsibility).