Denial Code CO 23

Denial Code CO 23 – Primary paid more than secondary allowance

In instances where the primary insurance allowed amount exceeds that of the secondary insurance allowable amount, it typically results in the denial of the claim by the secondary insurance provider. This denial is commonly indicated by denial code CO 23, which denotes that the primary insurance has already processed and allowed the claim for an amount that surpasses the secondary insurance’s allowance. Essentially, this means that the primary insurance has covered the claim in full based on their fee schedule, leaving no obligation for the secondary insurance to pay out any additional amount.

This denial scenario arises due to the coordination of benefits process, where two or more insurance policies cover the same healthcare expenses for an individual. The primary insurance is expected to pay first based on its policy terms and fee schedules, and the secondary insurance steps in to cover any remaining balances according to its own allowable amounts. However, when the primary insurance’s payment exceeds what the secondary insurance deems as payable under their fee schedule, the claim is denied as per denial code CO 23.

Explaining denial with an example:

Let’s consider Patient name Chris is insured with Medicare as primary and Medicaid as secondary. Provider has billed the claim to primary Medicare insurance with billed amount $300 for the services rendered to patient. Primary Medicare insurance processed the claim and allowed $250 and paid $200 with coinsurance $50, so here the contractual adjustment is $50. Now claim has been forwarded to secondary Medicaid along with primary EOB Medicare for the balance amount $50. But secondary Medicaid processed the claim and allowed $180 as per their fee schedule and denied the claim with denial code CO 23 – Primary paid more than secondary allowance.

In the case of patient Chris having Medicare as primary and Medicaid as secondary insurance, there is a coordination of benefits scenario that has led to a denial from the secondary insurance. The primary insurance, Medicare, processed the claim for services rendered at $300, and after adjustments, allowed $250, paying $200 with a $50 coinsurance. The contractual adjustment made by Medicare is $50. Subsequently, the claim was submitted to secondary Medicaid for the remaining balance of $50 as per the explanation of benefits (EOB) from Medicare.

However, Medicaid processed the claim differently, allowing $180 based on their fee schedule and issuing a denial with code CO 23 stating that the primary insurance paid more than the secondary’s allowable amount. This denial indicates that pursuant to the coordination of benefits rules, Medicaid recognizes that Medicare has already paid more than what Medicaid would typically allow for the services.

Steps to follow for denial code CO 23 resolution:

• First step is to check the secondary insurance allowed amount as per fee schedule? This involves cross-referencing the healthcare services provided with the secondary insurance provider’s fee schedule to determine the amount they will cover.
• Verifying the primary insurance allowed amount, payment, and patient responsibility is a crucial step in the healthcare reimbursement process. If the primary insurance payment is less than the secondary allowance and the denial is found to be invalid, it is essential to inform the representative and resend the claim for reprocessing. This ensures that the claim is accurately processed and the correct reimbursement is obtained.
• On the other hand, if the primary insurance payment is more than the secondary insurance allowance, the claim is considered valid. In such a scenario, it is important to record the claim number and call reference number for future tracking and reference purposes.

This process helps to streamline the claims reimbursement process, avoid payment discrepancies, and ensure that healthcare providers receive the appropriate compensation for their services. By following these steps diligently, healthcare organizations can effectively manage their revenue cycle and maintain financial stability.

Note: When the primary insurance pays more than what the secondary insurance allows, the latter often denies the allowance. This scenario typically results in the healthcare provider writing off the charges.

Frequently asked question on denial code CO 23:

Consider primary insurance allowed 100 percent and processed towards patient responsibility as out of pocket expense and claim forwarded to secondary Medicaid insurance. Secondary Medicaid allowed 50 percent of the billed amount as per their fee schedule and denied the claim with denial code CO 23, Can we bill the patient?

In the scenario described, the primary insurance has allowed 100 percent of the billed amount and processed the remaining amount towards the patient’s responsibility as an out-of-pocket expense. After this, the claim was forwarded to the secondary insurance, which in this case is Medicaid. However, Medicaid allowed only 50 percent of the billed amount based on their fee schedule and denied the claim with denial code CO 23. It is important to note that when dealing with Medicaid as a secondary insurance, providers should not bill the balance to the patient. Medicaid is a government-funded insurance program that operates based on specific guidelines and regulations. Billing the balance to Medicaid patients can result in non-compliance with Medicaid rules and could lead to potential repercussions for the provider.

Medical Billing Denials and actions – Top Denial codes Solutions (medicalbillingcycle.com)