CO-23: Adjustment due to other payer's decision

The payer is telling you that payment was changed because another payer has already processed the claim. They are coordinating benefits and using the earlier payer's decision to set what they will allow and pay. Mechanically, the system reads the coordination-of-benefits data, prior payment amounts, and internal fee schedules, then recalculates what is allowed as secondary or tertiary. The CO-23 portion becomes a contractual adjustment that must be written off and cannot be pushed to the patient unless the COB information itself is wrong and you correct it.

In behavioral health, CO-23 shows up a lot when you bill secondary coverage for PHP, IOP, or residential per-diem stays on the UB-04. For example, a commercial plan pays primary for IOP, then Medicaid as secondary applies CO-23 to align with the primary's allowed amount and your Medicaid contract. It is also common with carve-outs where a behavioral health administrator is primary for mental health and the medical plan is secondary. If you send a PHP day to the medical plan that already crossed over from the behavioral carve-out, the medical plan may apply CO-23 to remove any amount they see as already settled. Telehealth and outpatient SUD services see CO-23 when you bill 90837-95 or group codes after the primary payer has processed, but your claim to the secondary has missing or mismatched COB details. The result is an unexpected write off and delayed cash while you chase the correct EOB and coverage order.

• Confirm all active coverages and the correct primary, secondary, and tertiary order for the dates of service.
• Compare the payer's COB information to the primary EOB to see if coverage order, allowed amounts, and payments match.
• If the true primary was never billed or was billed incorrectly, send or correct the claim to the primary and obtain a final EOB.
• If the payer used the wrong prior payer or wrong allowed amount, submit a corrected claim with accurate COB fields and attach the correct primary EOB when the payer allows.
• If mental health or SUD benefits were misrouted between medical and behavioral carve-out plans, appeal with benefit documents and any prior authorization or clinical notes that show which payer is primary.
• Once you confirm the secondary processed correctly, adjust off the CO-23 amount per contract and bill only the PR-coded amounts to the patient.

• Verify insurance coverage and coordination-of-benefits order at intake and again at each level-of-care or authorization change, especially for Medicare and Medicaid combinations.
• Capture and store all primary EOBs quickly and load COB amounts into your billing system before creating secondary or tertiary claims.
• Set claim-scrubber rules to flag missing COB fields, missing primary EOB references, or impossible allowed amounts for your main behavioral health payers.
• Train front-end and UR staff on common behavioral carve-out setups so PHP, IOP, residential, detox, and telehealth claims go to the correct primary behavioral payer first.