Denial Code 23 (CARC 23): Meaning and How to Fix It
Your secondary insurer returns an ERA with OA-23 and less payment than expected. Is the claim denied? Should you resubmit or bill the patient? Not yet. Acting without checking the first payer's decision can create duplicate claims and incorrect patient balances.
Denial code 23 (CARC 23) means a payer accounted for an earlier insurer's payment or adjustments. Under X12 rules, it must appear with group code
OA (Other Adjustment). CARC 23 alone does not prove the claim was denied or handled incorrectly.
What Does Denial Code 23 Mean on an EOB or ERA?
CARC stands for Claim Adjustment Reason Code. On an electronic remittance advice (ERA), CARC 23 describes prior payer adjudication: how an earlier insurer paid or adjusted the claim.
Three pieces matter:
OA: Other Adjustment, the group code required with CARC 23.
23: The prior payer's payment or adjustment influenced this payer's calculation.
Other CARCs or RARCs: Additional reason or remark codes, when present, can explain other issues on the claim.
Check the entire service line. This guide to reading an ERA in medical billing explains where payment amounts and adjustment codes appear.
Is CARC 23 a Denial or an Adjustment?
OA-23 is an adjustment, not an automatic denial. It may appear on a fully paid, partly paid, or zero-payment claim. The full remittance tells you what happened.
Code | What it tells you | What to check |
OA-23 | Earlier payer activity affected this payment | Primary EOB and secondary calculation |
CARC 22 | Another insurer may be responsible under coordination of benefits (COB) | Correct primary/secondary payer order |
CO-45 | Charge exceeds an applicable fee schedule or contracted limit | Contractual adjustment and allowed amount |
PR-1 / PR-2 | Deductible or coinsurance assigned to the patient | Final EOB and billing restrictions |
Do not turn OA-23 into a patient bill or automatic write-off. It does not determine who owes the balance.
Why Does CARC 23 Appear on Secondary Insurance Claims?
A patient has two policies. The primary insurer processes the claim; the secondary considers that result under its coordination-of-benefits rules. OA-23 reports the earlier decision's impact.
The adjustment deserves investigation when:
The secondary payer received an outdated or incorrect primary EOB.
Primary payments or adjustments were entered twice or against the wrong service line.
The payer order changed after a new job, policy renewal, or Medicaid enrollment.
The secondary payment does not match the plan's actual COB method.
These are reasons to investigate, not definitions of CARC 23. OA-23 can appear when both insurers processed the claim correctly. It does not automatically signal incorrect procedure coding, a missing authorization, or late filing. Those problems have their own adjustment codes. On a multi-line claim, review each line separately; different services can have different prior-payer impacts.
Denial Code 23 Example: Primary and Secondary Payments
A practice bills $200. The primary insurer allows $150, pays $110, assigns $40 coinsurance and reduces the charge by $50.
Claim detail | Illustrative amount |
Billed charge | $200 |
Primary contractual adjustment | $50 |
Primary insurer payment | $110 |
Primary-assigned coinsurance | $40 |
Secondary insurer payment, if its rules allow | $30 |
The secondary ERA may show OA-23 after considering the first insurer's payment and adjustments. Here, $10 of coinsurance remains before the final patient-responsibility check. The secondary $30 payment is hypothetical, not an amount every plan must pay. The OA-23 amount is not always the sum of earlier payments and adjustments; the secondary payer's method determines it.
Accurate payment posting for therapy claims keeps those amounts from becoming false denials or inflated patient balances.
How to Fix Denial Code 23: Six Checks Before Resubmitting
Confirm the payer sequence. Check active policies and which insurer was primary on the date of service. Do not rely on today's coverage alone.
Pull the primary EOB or 835 ERA. Record payments, allowances, adjustments, cost-sharing and claim numbers by service line.
Compare the secondary claim data. Check whether primary payment and adjustment details transferred to the secondary claim correctly.
Read the full secondary remittance. Compare OA-23, other codes, the allowed amount and payment against plan rules.
Choose the correct action. If the calculation is right, post it. If primary adjudication is wrong, correct that first. If the secondary payer received bad data, follow its corrected-claim or reprocessing instructions.
Close the loop. Record claim and call references, follow-up dates and final payment. Reconcile the account balance.
A connected revenue cycle management process helps keep primary payments, secondary claims and accounts receivable from falling into separate queues.
When Should You Appeal a CARC 23 Adjustment?
Appeal only when a payer decision is demonstrably wrong. OA-23 alone is not grounds. Check whether the payer misread the primary EOB or misapplied its COB rules.
For review, prepare the claim, both remittances, policy details, affected lines and your disputed calculation. Ask whether correction, reconsideration or appeal applies; deadlines differ.
How Can Practices Prevent Repeat CARC 23 Problems?
Verify both policies and payer order at intake, renewal and every known coverage change.
Reconcile the primary payment before submitting secondary claims, unless an established crossover process handles it.
Match previous payer amounts to the correct claim and service line.
Review secondary ERAs before assigning patient responsibility.
Separate normal OA-23 entries from true underpayments in denial reports.
For other problems that need different fixes, see these common medical claim denial reasons.
Denial Code 23 FAQs
Does CARC 23 Mean Secondary Insurance Denied the Claim?
No. CARC 23 shows that a previous payer's decision affected the secondary payer's calculation. The claim might still receive payment. Check the full ERA, other adjustment codes and final paid amount before calling it a denial.
Can You Bill a Patient for an OA-23 Adjustment?
Not based on OA-23 alone. It does not establish patient responsibility. Check any PR amounts, the final EOB, payer contracts and applicable Medicare or Medicaid billing restrictions before issuing a statement.
Should You Resubmit or Appeal Denial Code 23?
Neither automatically. If OA-23 matches the primary EOB and secondary plan rules, post it correctly. Correct inaccurate claim data through the payer's stated process; request reconsideration or appeal when the payer's decision is demonstrably wrong.
The Final Check for a Denial Code 23 Claim
OA-23 means reconcile both payers, not automatically appeal. Match the primary EOB to the secondary ERA, verify the plan's calculation and post only the balance actually owed. Avoid billing families for adjustments they do not owe. If secondary-payment disputes keep piling up, PaceMave's denial management services can help review the remittances and pursue supported corrections.
