CARC 22 / CO-22: Coordination of Benefits Denials in Medical Billing

Claim Adjustment Reason Code (CARC) 22 is used when a healthcare payer determines that a claim or service may be covered by another payer under coordination-of-benefits (COB) rules. Medical billers may encounter this adjustment when reviewing an Electronic Remittance Advice (ERA) after a payer identifies other insurance coverage that could affect which payer is responsible for processing or paying the claim.

CARC 22 is sometimes reported with the CO (Contractual Obligation) adjustment group as CO-22. However, the adjustment alone does not establish which insurance plan should pay first, whether the other payer has processed the claim or what action the billing provider should take.

In this guide, we'll explain what CARC 22 means, how coordination of benefits works, where COB adjustments appear in an X12 835 version 5010 transaction, the difference between CARC 22 and CARC 23, and how medical billers and EDI professionals can investigate COB-related denials.

What Is Coordination of Benefits in Medical Billing?

Coordination of benefits is the process used to determine payment responsibilities when a patient has coverage through more than one health insurance plan or another potentially responsible payer.

COB rules help identify which payer should process the claim first and how any additional payer may consider the remaining eligible expenses.

Two common terms are:

• Primary payer: The payer responsible for considering the claim first under the applicable coordination rules
• Secondary payer: A payer that considers its payment responsibility after the applicable primary payer's adjudication

For example, a patient may have coverage through their employer and through a spouse's employer. Depending on the applicable COB rules, one plan may be primary and the other secondary.

Other circumstances may involve Medicare, Medicare Advantage, Medicaid, workers' compensation or other coverage arrangements. These situations are not always governed by the same rules.

Importantly, having two insurance plans does not mean the patient or provider can simply choose which payer processes the claim first. The payment order must be determined using the applicable coverage and coordination requirements.

What Does CARC 22 Mean in Medical Billing?

CARC 22 identifies a possible coordination-of-benefits issue. The payer is indicating that another payer may be responsible for some or all of the care. However, CARC 22 does not necessarily mean the entire claim or service was denied. Depending on the payer's adjudication, the remittance may report a partial payment alongside a CARC 22 adjustment, and other adjustments may also be reported.

This adjustment can arise when the payer believes other coverage should be considered before it determines its own payment responsibility.

For example, a provider may submit a claim to a health plan that has the patient listed as having another active insurance policy. If that health plan considers the other coverage primary, it may report CARC 22 while applying its COB rules.

However, CARC 22 does not independently prove that the payer's coverage information is correct. The other policy may have terminated, the payer order may be incorrect or the reported service may be subject to different coordination requirements.

The provider should investigate the payer's determination rather than assuming that every CARC 22 adjustment requires the same correction.

What Is the Difference Between CARC 22 and CO-22?

CARC 22 identifies the adjustment reason. CO-22 combines CARC 22 with the CO (Contractual Obligation) adjustment group.

CARC 22 is not limited to the CO group code in every situation. Medical billers should examine the actual adjustment group, reason code, monetary amount and other relevant remittance information before determining the appropriate follow-up.

Important: A correctly reported CO adjustment generally represents an amount that is not the patient's financial responsibility because of an applicable contractual obligation or regulatory requirement. The provider should not transfer an unpaid CO-22 adjustment to the patient simply because the payer issued no payment. If the adjustment or underlying coordination-of-benefits determination appears incorrect, the provider should investigate the payer's adjudication and follow the applicable correction or dispute procedures before changing the account's financial responsibility.

Common Reasons for Coordination of Benefits Denials

COB-related adjustments can occur for several reasons. The reported CARC identifies the payer's adjustment reason, but the underlying coverage information must still be verified.

Not every item in this table necessarily results in CARC 22. Depending on the specific circumstances, a payer may report another CARC or identify the problem earlier in claim processing.

Where Is CARC 22 Reported in the X12 835?

In the X12 835 version 5010 transaction, CARC 22 is reported in a CAS (Claim Adjustment) segment with an applicable adjustment group and monetary amount.

The CAS segment may appear at the claim level in Loop 2100 or at the service level in Loop 2110.

For the first adjustment position in a CAS segment, CAS01 contains the adjustment group code, CAS02 contains the CARC and CAS03 contains the associated adjustment amount.

As with other CARCs, code 22 can appear in a later adjustment position when multiple adjustments share the same group code.

Example: Reading a CO-22 Adjustment

Consider a professional medical claim containing a service billed at $150. The payer determines that another health insurance plan may be responsible for the service under applicable coordination-of-benefits rules.

In this illustration, the payer reports no payment and adjusts the full service charge using CO-22.

Illustrative educational excerpt using fictional billing information. This is not a complete X12 835 transaction and does not establish that every payer will report the same adjustment group, amount or processing outcome for similar circumstances.

Understanding the Example

In this particular example, the submitted service charge is $150, the CO-22 adjustment is $150, and the payer reports a $0 payment.

$150 - $150 = $0 payer payment

However, CARC 22 does not always result in an adjustment equal to the entire submitted charge. A payer may report a partial payment alongside a CARC 22 adjustment, or report additional adjustment reasons that account for other portions of the charge. The actual financial outcome must be determined from the reported payment amounts and applicable CAS adjustments.

This example demonstrates one possible COB-related adjustment, but it does not establish which payer should ultimately be primary or whether another insurer will pay the service.

The provider should investigate the coverage information and determine whether the payer order is correct, whether another payer needs to be billed or whether the current payer's COB records require review.

Important: In this example, the $150 CO-22 adjustment represents an amount that is not the patient's financial responsibility. The provider should not transfer this adjustment to the patient simply because the payer issued no payment. If the coordination-of-benefits determination or adjustment appears incorrect, the provider should investigate the adjudication and follow the applicable payer's correction or dispute procedures.

What Is the Difference Between CARC 22 and CARC 23?

Although CARC 22 and CARC 23 both relate to coordination of benefits, they describe different circumstances.

CARC 22 identifies possible coverage by another payer. CARC 23 identifies the impact of previous payer adjudication, including prior payments and adjustments.

Under X12's applicable reporting requirements, CARC 23 is used with the OA (Other Adjustment) group code. It is not interchangeable with CO-22 or a new contractual adjustment reported by the secondary payer.

This distinction is important for EDI applications because prior payer payments and adjustments should not be posted again as new payments or write-offs from the secondary payer.

Example: How OA-23 May Appear on a Secondary Payer's 835

Consider a hypothetical coordination-of-benefits scenario involving one medical service with a $200 submitted charge. The following amounts are assumed for educational purposes to illustrate how previous payer adjudication may affect a secondary payer's remittance.

Assume the primary payer previously processed the service and reported the following financial amounts:

The primary payer's adjudication balances as follows:

$200 - $120 - $50 - $30 = $0 remaining unaccounted amount

Now assume the claim is submitted to a secondary payer with the appropriate previous payer information. After applying its own coverage and coordination rules, the secondary payer determines that it will pay an additional $20 toward the $30 originally assigned to patient responsibility, leaving $10 as the remaining patient coinsurance.

In this hypothetical scenario, the secondary payer recognizes the $120 primary payer payment and $50 contractual adjustment as amounts already accounted for through the previous payer's adjudication.

The secondary payer may communicate the resulting service-level adjudication using the following simplified X12 835 example:

Illustrative educational excerpt using hypothetical primary and secondary payer amounts. This is not a complete X12 835 transaction. The example demonstrates one possible coordination-of-benefits outcome and does not establish how every secondary payer calculates benefits, reports OA-23 or determines remaining patient responsibility.

Understanding the Secondary Payer Example

In this illustration, the $170 OA-23 adjustment represents amounts already accounted for through the primary payer's adjudication: the $120 primary payer payment plus its $50 contractual adjustment.

$120 primary payment + $50 contractual adjustment = $170 OA-23

The original $30 patient responsibility is handled separately. Under the assumed secondary payer adjudication, the secondary payer pays $20 toward that amount and reports the remaining $10 as patient coinsurance using CAS*PR*2*10~.

$30 original patient responsibility - $20 secondary payment = $10 remaining patient responsibility

The secondary payer's reported amounts balance as follows:

$200 - $170 - $10 = $20 secondary payer payment

Important: The $170 OA-23 amount is not an additional payment or a new contractual write-off. It represents the financial impact of amounts previously accounted for through the primary payer's adjudication, helping prevent duplicate posting of those amounts. Although OA-23 equals the previous payer's payment plus contractual adjustment in this example, the actual amount may differ depending on the adjudication circumstances and applicable X12 reporting requirements.

The example illustrates how a secondary payer may account for previous payer adjudication while separately reporting its own payment and the remaining patient responsibility. It differs from CARC 22, which indicates possible coverage by another payer. Medical billers should review the actual payer information and applicable coordination-of-benefits requirements rather than treating this illustration as a universal calculation method.

Reporting Primary Payer Information on an X12 837 Secondary Claim

When an electronic claim is submitted to a secondary or subsequent payer, the X12 837 transaction may need to include relevant information from the previous payer's adjudication.

The exact requirements depend on the transaction type, applicable X12 implementation guide and payer instructions.

For example, prior payer claim-level adjustments may be reported using applicable CAS segments in Loop 2320, while prior payer service-level adjustments may be reported using CAS segments in Loop 2430.

Prior payer payment information is also reported through the appropriate claim- or service-level elements according to the transaction's requirements.

The original payer's adjustment information should be represented accurately rather than reassigned to different adjustment groups solely to satisfy a billing system's internal categories.

Important: The previous payer's 835 and the secondary claim's 837 serve different purposes. The 835 reports the prior adjudication, while the 837 communicates the information needed for the next payer to consider the claim. Not every prior payer adjudication requires the same combination of claim-level and service-level segments.

Does the Primary Payer Always Need to Process the Claim First?

In many coordination-of-benefits situations, the payer identified as primary must consider the claim before the secondary payer determines its own payment responsibility.

However, the applicable rules may provide exceptions or special processing arrangements. These may involve program-specific billing requirements, automatic crossover arrangements or other permitted coordination procedures.

For example, some Medicare claims are automatically transmitted to a supplemental insurer after Medicare processes the claim. In other situations, a provider may need to submit a separate secondary claim with the relevant primary payer adjudication information.

Medical billers should verify the required process rather than assuming that every secondary claim must be manually submitted or that every payer uses the same coordination sequence.

How to Investigate a CARC 22 Coordination of Benefits Denial

The following steps provide a general investigation process for a COB-related adjustment reported through an X12 835 or readable remittance advice.

Step 1: Identify the Reported Adjustment

Review the affected claim or service, the reported CARC 22, adjustment group, monetary amount and any accompanying remittance information.

Determine whether the payer has denied or adjusted the entire claim or only an individual service.

Step 2: Verify Current and Historical Insurance Coverage

Review all potentially applicable insurance plans and confirm coverage effective dates, termination dates and available eligibility information for the date of service.

Do not assume that a plan currently listed as active was necessarily responsible for the service on the date it was furnished.

Step 3: Determine the Appropriate Payer Order

Review the applicable coordination-of-benefits rules to determine which insurer or other entity is primary and which is secondary.

The order may depend on the type of coverage, policyholder relationship, applicable program requirements and other circumstances.

Step 4: Review Previous Payer Adjudication

If another payer has already processed the claim, review its ERA, EOB or other adjudication information. Confirm the payer's payment, adjustments and relevant claim or service details.

Determine whether the current payer received the required prior payer information and whether the amounts were accurately reported.

Step 5: Determine Whether the Payer's COB Records Are Correct

If the payer's records identify incorrect coverage or payer order, follow the applicable process for resolving the discrepancy.

Depending on the payer, this may involve provider inquiries, policyholder verification, an eligibility update or another payer-specific action.

Step 6: Determine the Appropriate Claim Follow-Up

After confirming the coverage and payer order, determine whether the claim should be submitted to another payer, corrected, reconsidered or handled through another permitted resolution process.

Follow the relevant payer's instructions rather than automatically resubmitting the same claim.

Step 7: Verify the Subsequent Outcome

Retain the original adjudication, payer reference information and documentation used to resolve the COB issue. Review subsequent acknowledgments or remittance information to confirm the outcome.

This can help prevent duplicate submissions, repeated COB denials and incorrect payment posting.

Common Mistakes When Working CARC 22

Because coordination-of-benefits issues may involve multiple payers and several processing stages, incomplete information can lead to unnecessary resubmissions or incorrect billing decisions.

Medicare, Medicaid and Commercial Payer Considerations

Coordination-of-benefits requirements vary among government healthcare programs, commercial insurers and managed care arrangements.

Although CARC 22 is standardized, the information needed to resolve a COB adjustment may depend on the applicable coverage, payer order and claim-processing requirements.

Original Medicare

Medicare Secondary Payer (MSP) requirements determine circumstances in which another insurer or entity has primary payment responsibility before Original Medicare.

For example, certain employer group health plans, workers' compensation arrangements or liability insurance situations may affect whether Medicare is primary or secondary.

When a Medicare claim receives a COB-related adjustment, providers should review the applicable MSP rules, Medicare coverage records and Medicare Administrative Contractor (MAC) instructions.

For claims involving incorrect MSP information, the resolution may involve updating applicable coverage records, correcting claim information or using the appropriate Medicare claim review process.

Medicare also supports automatic crossover of certain processed claims to supplemental insurers when the necessary arrangements are in place. The provider should verify whether a crossover occurred before submitting another claim.

Medicare Advantage

Medicare Advantage plans may have their own operational COB requirements, claim submission processes and provider dispute procedures, subject to applicable federal requirements.

Providers should follow the applicable plan's instructions rather than assuming that every Original Medicare MSP correction or claim-processing procedure applies to Medicare Advantage.

Medicaid

Medicaid generally serves as a payer of last resort when another legally liable third party is available to pay for covered care, subject to applicable statutory exceptions and program rules.

State Medicaid agencies and Medicaid managed care organizations may have different third-party-liability reporting, claim submission and recovery procedures.

Providers should verify the applicable state and managed care requirements, including circumstances in which Medicaid may process a claim before recovery from another responsible payer.

Commercial Payers

Commercial insurers, including Blue Cross Blue Shield plans, UnitedHealthcare and other health plans, may apply coordination-of-benefits rules through their plan documents, provider agreements and applicable regulations.

Secondary claims may require prior payer information reported electronically through the appropriate 837 transaction structure or through another accepted submission method.

The information required to establish primary and secondary payment responsibility and the permitted correction procedures may vary among plans.

Clearinghouses and Billing Applications

Clearinghouses and billing platforms may assist with electronic secondary claims, payer identification and reporting prior payer payment information.

However, automated coordination features do not eliminate the need to verify coverage, payer order and accuracy of the prior adjudication data.

For EDI developers, preserving the original adjustment groups, CARCs, amounts and claim- or service-level reporting details is particularly important when transferring prior payer adjudication into a secondary claim.

How to Help Prevent Coordination of Benefits Denials

Although not every COB issue can be prevented, accurate insurance records and reliable claim follow-up processes can reduce avoidable denials and payment delays.

Recommended practices include:

• Verify all known insurance coverage before submitting claims
• Confirm coverage effective and termination dates
• Determine the applicable primary and secondary payer order
• Review eligibility and COB updates when insurance information changes
• Preserve primary payer remittance and payment information
• Submit prior payer adjudication details in the appropriate electronic claim structure
• Monitor claim acknowledgments and investigate COB-related adjustments promptly
• Verify automatic crossover before submitting a potentially duplicate secondary claim

For electronic billing systems, retaining accurate relationships among original submissions, payer adjudications and subsequent secondary claims can also help prevent duplicate postings and improve account reconciliation.

Official CARC 22 and CARC 23 Definitions

X12 maintains the official Claim Adjustment Reason Code list, including CARC 22 and CARC 23.

For current code definitions and applicable usage instructions, refer to X12 Claim Adjustment Reason Codes.

These codes should be interpreted together with the applicable adjustment groups and the complete X12 remittance information. The exact COB claim submission requirements should be verified against the applicable X12 implementation guide and payer instructions.

Frequently Asked Questions About CARC 22

Key Takeaway

CARC 22 identifies a coordination-of-benefits adjustment indicating that care may be covered by another payer. When reported with the CO adjustment group, it may appear as CO-22. The adjustment may involve all or part of a claim or service, and its presence does not automatically mean the payer issued no payment.

In the X12 835 version 5010 transaction, CARC 22 is reported in the CAS segment at the claim level in Loop 2100 or the service level in Loop 2110.

Medical billers should also distinguish CARC 22 from CARC 23. CARC 23, reported with the OA adjustment group, identifies the applicable financial impact of previous payer adjudication rather than a new denial simply because another insurer exists.

For medical billers and EDI professionals, resolving a COB-related adjustment requires verifying the actual insurance coverage, applicable primary and secondary payer order, prior adjudication information and payer-specific requirements.

Most importantly, CARC 22 does not automatically establish which payer is responsible, whether a claim should be resubmitted or whether an unpaid amount may be billed to the patient. The appropriate action depends on the specific coverage and applicable coordination rules.

Related Eclaims Articles and Resources

• What Are Claim Adjustment Reason Codes (CARCs)?
• How to Read an X12 835 ERA: Claim Payments, Adjustments & Denials
• What Are Claim Adjustment Group Codes (CO, PR, OA & PI)?
• Rejected Claim vs. Denied Claim
• CARC 16 / CO-16: Missing or Incorrect Claim Information

Disclaimer: This article provides general educational information about CARC 22, coordination of benefits, prior payer adjudication and electronic healthcare claim transactions. It does not replace official X12 implementation guides, payer instructions, provider agreements or applicable laws and regulations. Coverage information, coordination requirements and payer policies may change. Always verify the current applicable requirements before making billing or claim-resolution decisions.