OA-23 Denials Explained: How to Identify, Appeal, and Prevent Them

Managing denials like OA-23 is a critical part of healthcare revenue cycle management (RCM). These denials, often tied to prior payer adjudication, can disrupt cash flow and burden RCM teams with additional work. Understanding this denial code and implementing strategies to manage and prevent it is essential for maintaining financial health and operational efficiency.

In this article, we’ll explore what the OA-23 denial code means, how it compares to similar codes, its common causes, and the financial and operational impacts on healthcare organizations. You’ll also learn actionable steps to appeal OA-23 denials and prevent them from occurring.

What Is an OA-23 Denial?

The OA-23 denial code signifies that a claim adjustment was made due to prior payer adjudication, including payments or adjustments already processed by another payer.

• Prefix Explanation: The prefix "OA" stands for "Other Adjustment," meaning the adjustment is not directly tied to patient responsibility (PR) or a contractual obligation (CO).
• Financial Responsibility: The adjustment or denial is typically the responsibility of the payer, as the prior payer’s decision impacts the final payment or adjustments.

This denial usually arises in coordination of benefits (COB) scenarios, where a primary payer has already processed the claim, and the secondary payer adjusts based on that adjudication.

Comparison: OA-23 vs Similar Denial Codes

Denial Code	Prefix Meaning	Reason/Description	Who's Financially Responsible
OA-23	Other Adjustment	Impact of prior payer(s) adjudication, including payments/adjustments	Payer
CO-22	Contractual Obligation	Payment adjusted due to a contractual agreement	Provider
PR-1	Patient Responsibility	Deductible amount owed by the patient	Patient

The key difference lies in financial responsibility. While OA-23 shifts responsibility to the payer due to prior adjudication, CO-22 and PR-1 indicate adjustments tied to provider contracts or patient obligations, respectively.

Common Causes of OA-23 Denials

1. Coordination of Benefits (COB) Errors: Missing or incorrect COB information leads the secondary payer to adjust or deny the claim.
2. Duplicate Submission: Submitting the same claim to multiple payers without proper documentation of prior payments.
3. Untimely Filing: Claims not submitted to the secondary payer within their filing deadlines.
4. Incorrect Primary Payer Information: Errors in identifying the appropriate primary payer cause adjudication issues.
5. Failure to Attach EOB/ERA: Missing the Explanation of Benefits (EOB) or Electronic Remittance Advice (ERA) from the primary payer.

Impact on Revenue Cycle Teams

OA-23 denials can introduce significant financial and operational challenges for healthcare organizations.

Financial Impact:
- Revenue loss due to denied claims requiring rework.
- Increased accounts receivable days, delaying cash flow.
- Possible write-offs if appeals are unsuccessful or deadlines are missed.
- Higher operational costs due to dedicated denial management efforts.

Operational Impact:
- Diverted staff time from other critical functions.
- Need for expertise in COB rules, payer policies, and documentation requirements.
- Increased coordination between billing, coding, and clinical teams.
- Greater demand for tracking and analyzing denial patterns to identify root causes.

To mitigate these impacts, advanced denial management tools like CombineHealth.ai’s Adam (AI Denial Manager) can streamline the process of identifying, tracking, and resolving OA-23 denials, reducing revenue leakage and improving cash flow.

Steps To Appeal an OA-23 Denial

Step 1: Review the Denial Notice
Carefully examine the denial notice to confirm it is an OA-23 denial. Look for details about prior payer adjudication and specific reasons for the adjustment.

Step 2: Gather Documentation
Collect all necessary documentation, including the EOB/ERA from the primary payer, patient insurance information, and any other supporting records.

Step 3: Verify Eligibility
Double-check the patient’s insurance coverage and COB details to ensure the claim was submitted to the correct payers in the correct order.

Step 4: Prepare Appeal Letter
Draft a clear appeal letter addressing the denial reason. Include all supporting documentation, a detailed explanation of the issue, and a request for reconsideration.

Step 5: Submit Within Deadline
Ensure the appeal is submitted within the payer’s specified timeline to avoid automatic rejection.

Step 6: Track and Follow Up
Monitor the status of the appeal and follow up with the payer if no response is received within the expected timeframe.

How To Prevent OA-23 Denials

Front-End Prevention

• Conduct thorough eligibility and COB verification at the time of patient registration.
• Ensure accurate entry of insurance details and payer order in the system.

Billing Best Practices

• Attach EOB/ERA documentation from the primary payer when submitting claims to secondary payers.
• Avoid duplicate claim submissions by implementing internal checks before claim transmission.

Technology Solutions

• Utilize automated tools for COB verification to reduce manual errors.
• Implement real-time claim scrubbing software to flag missing or incorrect information before submission.

CombineHealth.ai's AI-powered solutions, including Rachel (AI Appeals Manager), help prevent OA-23 denials by automating eligibility verification and claim scrubbing. When denials occur, Rachel streamlines the appeals process, improving success rates and reducing turnaround times.

FAQs

Q1: What does OA-23 mean in medical billing?
OA-23 indicates that a claim adjustment was made due to prior payer adjudication, based on payments or adjustments already processed by another payer.

Q2: Can OA-23 denials be appealed?
Yes, OA-23 denials can be appealed by providing proper documentation and addressing the payer’s denial reason.

Q3: How long do I have to appeal?
Appeal timelines vary by payer, so it’s important to review the denial notice and act promptly to meet deadlines.

Q4: How can I prevent these denials?
Focus on accurate COB verification, proper documentation, and leveraging automated denial prevention tools. See our complete guide on denial prevention.