OA-20 Denials Explained: How to Identify, Appeal, and Prevent Them

Denial codes are a persistent challenge for healthcare revenue cycle management (RCM) teams, and OA-20 is one of the more complex codes to address. These denials occur when a claim is rejected because the injury or illness is covered by a liability insurance carrier rather than the patient’s health insurance.

Understanding the OA-20 denial code is crucial for organizations aiming to minimize revenue leakage, streamline operations, and improve cash flow. This article will break down what OA-20 means, how to address it through appeals, and the steps you can take to prevent it altogether.

What Is an OA-20 Denial?

An OA-20 denial indicates that the submitted claim cannot be processed by the payer because the injury or illness is covered by a liability carrier, such as auto insurance, workers' compensation, or general liability insurance.

The prefix “OA” stands for Other Adjustment, signifying that the financial responsibility does not fall under the typical patient or provider obligations. In this case, the liability carrier is deemed responsible for covering the claim. Identifying and addressing this adjustment type correctly is critical to ensuring that claims are routed to the appropriate payer.

Comparison: OA-20 vs Similar Denial Codes

Denial Code	Prefix Meaning	Reason/Description	Who's Financially Responsible
OA-20	Other Adjustment	Injury/illness covered by liability carrier	Liability carrier
PR-1	Patient Responsibility	Deductible not met	Patient
CO-45	Contractual Obligation	Charge exceeds payer’s allowable amount	Provider

OA-20 differs significantly from PR or CO denials as it involves third-party liability carriers rather than standard health insurance payers. This requires a different approach to claim resolution, including coordination with liability carriers and legal documentation.

Common Causes of OA-20 Denials

1. Incorrect Payer Submission: The claim is mistakenly submitted to the patient’s health insurance instead of the liability carrier.
2. Incomplete Liability Information: Missing or incorrect details about the liability carrier in the claim submission.
3. Coordination of Benefits Errors: Failure to verify whether the liability carrier is primary or secondary.
4. Documentation Gaps: Insufficient evidence linking the injury or illness to the liability carrier’s coverage.
5. Missed Timely Filing Deadlines: Delays in submitting claims to the liability carrier within the allowable timeframe.

Impact on Revenue Cycle Teams

OA-20 denials create significant financial and operational challenges for healthcare organizations:

Financial Impact:
- Direct revenue loss from claims denied by health insurers that require resubmission to liability carriers.
- Increased accounts receivable (AR) days, delaying cash flow and straining financial resources.
- Write-offs if liability carrier claims are not pursued or appeals are unsuccessful.
- Additional costs from manual rework and follow-ups.

Operational Impact:
- Staff time diverted from other critical functions to investigate and address OA-20 denials.
- Need for specialized training to handle liability carrier claims and documentation requirements.
- Increased coordination between billing, coding, and clinical teams to gather necessary information.
- Challenges in tracking denial trends and appeal outcomes without advanced tools.

To mitigate these impacts, RCM teams should leverage technology like CombineHealth.ai’s Adam (AI Denial Manager), which automates denial tracking, identifies trends, and expedites resolution.

Steps to Appeal an OA-20 Denial

Step 1: Review the Denial Notice
Carefully read the Explanation of Benefits (EOB) or Remittance Advice (RA) to confirm why the claim was denied under OA-20.

Step 2: Gather Documentation
Obtain all necessary documentation, including patient medical records, incident reports, and details about the liability carrier.

Step 3: Verify Eligibility
Confirm the liability carrier’s coverage and determine whether it is primary or secondary to the patient’s health insurance.

Step 4: Prepare Appeal Letter
Draft a detailed appeal letter that includes the denial reason, supporting documentation, and a clear argument for claim reimbursement.

Step 5: Submit Within Deadline
Ensure the appeal is submitted to the liability carrier within their stated timeframe to avoid automatic claim rejection.

Step 6: Track and Follow Up
Monitor the appeal status and follow up with the liability carrier regularly to expedite resolution.

How to Prevent OA-20 Denials

Preventing OA-20 denials requires a proactive approach across the revenue cycle.

Front-End Prevention

• Verify Payer Information: Confirm whether the patient’s injury or illness is covered by a liability carrier during the registration process.
• Capture Liability Details: Collect accurate and complete liability carrier information, including policy numbers and contact details.

Billing Best Practices

• Ensure Accurate Claim Submission: Route claims to the appropriate liability carrier and attach all required documentation.
• Monitor Coordination of Benefits: Verify the order of payer responsibilities to avoid submission errors.

Technology Solutions

• Automated Eligibility Verification: Use tools like CombineHealth.ai’s platform to verify liability coverage in real time.
• Claim Scrubbing Tools: Identify potential errors before submission to prevent unnecessary denials.

CombineHealth.ai’s Rachel (AI Appeals Manager) complements these processes by automating appeals and reducing turnaround times, ensuring that organizations recover revenue more efficiently.

FAQs

Q1: What does OA-20 mean in medical billing?
OA-20 indicates that the liability carrier, rather than the health insurance payer, is responsible for covering the claim.

Q2: Can OA-20 denials be appealed?
Yes, OA-20 denials can be appealed by providing the necessary documentation to the liability carrier and following their appeal process.

Q3: How long do I have to appeal?
The timeline for appealing an OA-20 denial varies by liability carrier. It’s critical to review the carrier’s specific deadlines and act promptly.

Q4: How can I prevent these denials?
Proactively verify liability coverage and ensure accurate claim submission. See our complete guide on denial prevention.