Denial code or OA-23 indicates a claim denied because another insurance company had already reviewed or paid for it. Healthcare providers face this denial if there are multiple payors involved, i.e., when a patient has both primary and secondary insurance.
If the healthcare provider submits the claim to the secondary payor without including the primary insurer’s Explanation of Benefits (EOB), or if the information doesn’t match, the secondary payor can’t process the claim and issues an OA-23 denial.
Private insurers, led by Aetna, Cigna, BCBS, UnitedHealth, deny 15% of the claims, says a research conducted by Premier, Inc. National Survey. The survey also shows that 54.3% of these denials were overturned, but not before costly appeals and a continuous struggle for the providers.
The data was collected from healthcare facilities like private practices, hospitals, health systems, and post-acute care providers. Considering that payors inspect around 3 billion medical claims per annum, healthcare facilities spend approximately $43.48 per claim to resolve denials and recover owed revenue, translating into a staggering $19.7 billion a year.
Initially, the amount seems meagre; however, when you take into account the clinical labor and expenses required to tackle claim denials, the costs can go through the roof. It only adds to the financial distress, requiring more effort, time, and energy spent on chasing claims and arguing back and forth with insurance companies.
As a healthcare provider, staying proactive and investing in staff education costs less than constantly reacting to and resolving claim denials. One of the trickiest and troublesome denial codes in medical billing affecting healthcare practice’s revenue is OA-23.
Denial Code 23 (OA-23) flags a claim affected by another payor’s actions, often tied to Coordination of Benefits (COB) mix-ups. If you’re a medical biller, coder, or practice manager, you must’ve faced this denial and felt the frustration of delayed payments.
Let’s take you through Denial Code 23 and tell you what is it, why it happens and how to fix it to ensure a continuous income stream.
What Is Denial Code 23? Complete Description
Denial Code 23, also known as OA-23, is faced when a claim is impacted by prior payor adjudication, i.e., another insurer has already reviewed, adjusted, or paid the claim before it was submitted to the current payor. This code is commonly seen in Coordination of Benefits (COB) situations and signals that additional information is needed before the claim can be processed.
Simply put, the payor is saying, “We can’t proceed until you tell us what the other insurance did.” If that information is missing or unclear, the claim gets rejected. This can hinder reimbursements and cause delays in cash flow, especially for clinics and hospitals managing patients with multiple insurance plans.
This denial is often experienced by practices with patients having dual coverage, like Medicare paired with a private plan like Delta or Cigna. For instance, a patient might have a $1,500 cataract surgery (CPT 66984), with Medicare as the primary payor covering $1,000.
The secondary payor, say Cigna, needs Medicare’s Explanation of Benefits (EOB) to process the remaining $500. Without that EOB, or if the claim is sent to Cigna first, the healthcare provider will get an OA-23 denial.
According to The American Academy of Professional Coders (AAPC), COB-related denials like OA-23 account for up to 15% of rejections in high-volume practices. Checking insurance eligibility upfront and ensuring the correct payor order can save hours of rework for providers and their staff.
Understanding Coordination of Benefits (COB)
Coordination of Benefits (COB) is the system payors use to determine which insurance company pays first, for a patient covered under more than one plan. Denial Code 23 usually shows up when there’s a mix-up in this coordination, i.e., either the primary insurance’s decision isn’t included, or the order of billing is incorrect.
In a correct COB flow, the primary insurance processes the claim first, issues an Explanation of Benefits (EOB), and the secondary payor covers any remaining balance. If the EOB is missing, incorrect, or not aligned with the secondary claim, providers face Denial Code 23.
For billers and coders, this code is a red flag and hints towards COB sequence reviewing.
COB is like a relay race where each payor has to take their turn in the right order, or the whole race (claim) falls apart. Imagine a patient with both Medicaid and Cigna coverage for a $2,000 knee arthroscopy (CPT 29881). Medicaid, as the primary payor, might cover $1,200 and send an EOB detailing their payment.
Cigna, the secondary payor, needs that EOB to decide what they’ll cover, i.e., the remaining $800 minus any patient copay. If the provider sends the claim to Cigna first or forgets the EOB, you’ll get an OA-23 denial. According to The Medical Group Management Association (MGMA), COB errors are a top denial reason in practices with 20% or more dual-covered patients.
To avoid this, verify coverage at intake using an eligibility checker tool. Such tools pull real-time data from payors like Medicare or Blue Cross Blue Shield. Staff training on COB rules, such as Medicare’s priority over employer plans for seniors, is also the key. You can cut COB denials by 25%, if you implement periodic COB refreshers for your assisting staff.
Common Reasons for Denial Code 23
Here are some common reasons why providers experience the denial code 23.
- The claim was submitted to the secondary payor before the primary processed it
- EOB from the primary insurer not attached
- Mismatched patient insurance information
- Incorrect coordination of insurance plans
- COB not updated in the payor’s system
Even one of these issues can result in an automatic denial. Fixing it often requires rechecking insurance eligibility, resubmitting claims with the correct documents, and verifying COB order with patients. Each of these reasons can trip up even seasoned billers. For example, submitting a claim to Humana before Medicare processes it is a classic mistake, as Medicare is often primary for patients over 65 years of age.
An experienced medical biller working for a renowned RCM company says that once they mistakenly sent a $3,000 claim for a colonoscopy to Humana (secondary) before Medicare (primary), and it resulted in OA-23 denial. Missing EOBs are another headache. Payors like Aetna won’t touch a secondary claim without the primary’s payment details.
Mismatched info, like an old insurance ID from a patient’s previous employer, can also cause rejections. Incorrect COB order often happens when patients don’t clarify which plan is primary, like mixing up a spouse’s plan with their own. Outdated COB data in systems can persist if patients switch insurers without notifying the practice.
Using real-time eligibility tools or calling payors like UnitedHealthcare to confirm coverage in advance can prevent such errors. Regular audits of patient records also help catch outdated information before it becomes a denial.
Financial Impact of OA-23 Denials
To some, denial code 23 may seem like a minor administrative obstacle; however, it has substantial financial consequences. Every denial means delayed payments, extra staff hours, and possible claim write-offs if not resolved on time. Healthcare practices frequently encountering these denials often suffer from billing inefficiencies that affect overall revenue cycle performance and profitability.
Moreover, repeated COB issues can impact your clean claims rate. That means more time chasing reimbursements and less time focusing on patient care. If not addressed, it becomes a cycle of rework, resulting in burnout that drains productivity. It also leads to revenue leaks and compliance issues.
Cost of OA-23 Denials
The cost of OA-23 denials adds up fast. A careful estimate by MGMA tells us that efforts to rework a denied claim can cost somewhere between $25–$100. It includes factors like staff time spent, resubmission efforts, and follow-up calls. For a practice handling 2,000 claims monthly, a 10% OA-23 denial rate could mean $5,000–$20,000 in rework costs alone.
If claims aren’t resolved within payor deadlines (often 90–180 days), they become write-offs, which impact your practice’s revenue directly. A hospital in Texas lost $50,000 in 2023 owing to the COD write-offs after failing to resubmit claims in time. Denials also frustrate patients, who may receive unexpected bills at the last moment.
For example, a patient hit with a $300 balance because of a COB mix-up might delay future visits. It affects the patient volume. Investing in COB-focused software like a claim scrubber, or outsourcing to professional medical billing companies like I-Med Claims can boost clean claim rates by 15–20%. It not only saves you money but also boosts your income and saves you from frustration.
How to Prevent OA-23 Denials?
Verify Insurance at Every Visit
As healthcare providers or team members of a provider, check to ensure whether a patient’s primary and secondary plans are current and valid.
Train Staff on COB Protocols
Investing in staff training goes a long way in mitigating errors. Front-desk and billing teams should know how to identify and record primary vs. secondary coverage.
Attach EOBs with Secondary Claims
Always include the primary insurer’s EOB when submitting to the secondary payor. This way, you’re ensuring a correct sequence and lowering the chances of errors.
Use Claim Scrubbing Tools
Modern claim scrubbing tools can lower the burden off your shoulders. These automation-based tools can detect COB issues before submission and help you stay clear of denials.
Audit and Track Denials
Monitor how often denial code 23 appears and address any patterns in specific departments or processes. A careful review helps you catch the real reason causing revenue loss.
Ensure Prevention by Staying Vigilant
Being proactive is the key to preventing OA-23. Regular eligibility checks can catch changes, like a patient switching from Anthem to Aetna. Training staff on COB nuances, like knowing Medicare is primary for seniors with employer plans, avoids mix-ups.
Automated tools streamline the process by verifying coverage in seconds. Smaller practices can also benefit from outsourcing to firms like I-Med Claims, which specialize in COB compliance.
Don’t forget to verify insurance at every visit, even for returning patients. It helps you catch changes like a new secondary plan from a spouse’s job. Practices that use automated eligibility checking tools to verify coverage in real-time enjoy 30% reduced COB errors.
Training Is Critical to Keep OA-23 At Bay
Invest in educating your staff about the technicalities involved. AAPC conducts regular COB workshops for professionals where they teach how to spot primary vs. secondary payors, like when Medicaid comes first as compared to private plans for low-income patients.
Attaching EOBs is non-negotiable and if your staff misses out on it, you’re inviting trouble. For instance, a private insurance can deny a claim for a missing Medicare or Medicaid EOB.
Claim scrubbers can save you valuable time, effort, and resources by flagging COB issues before submission.
Auditing denials monthly helps spot patterns, i.e., if OA-23 denials are happening a lot in your orthopedic department, it could mean the staff isn’t collecting patient insurance info properly during check-in. Outsourcing to expert medical billing firms like I-Med Claims can enhance revenue, minimize errors, and reduce denials for small practices without dedicated billing teams.
Documentation Matters in COB Denials
Clear, consistent, and detailed documentation is your first line of defense against COB-related denials. Make sure each patient’s insurance information is double-checked prior to the provision of treatment. When billing to a secondary payor, ensure the primary EOB is accurate and attached.
Keep notes on all communication with payors and patients, as this may be required if you need to appeal. Also, consider implementing a policy to update COB details every 90 days. Insurance statuses can change without notice, and outdated information leads directly to OA-23 rejections.
When to Appeal a Denial Code 23?
After verifying all COB details in the claim, ensure that everything is correct and the EOB is attached. If you still face a denial, you have the legal right to appeal. In the appeal to have the denial overturned, you must:
- Provide proof of primary payor adjudication
- Include detailed notes and reference numbers
- Resend the complete, corrected claim with appeal letter
Timely and well-prepared appeals are your chance to fight back against unfair OA-23 denials, especially when the error is on the payor’s end. Don’t hesitate to escalate if you’re facing repeated issues with the same insurance provider.
If you’ve got the primary EOB, e.g., Medicaid’s payment, and the claim still got rejected by a private insruance, i.e, secondary payor, gather your evidence such as the EOB, claim ID, and call logs. A denial appeal expert working for I-Med Claims overturned 60% of OA-23 denials by appealing with detailed EOBs within 30 days.
Filing within the payor’s appeal window, i.e., typically 60–180 days, is critical to avoid write-offs. As per MGMA, persistent appeals with solid documentation can reverse up to 70% of denials.
Payor-Specific COB Challenges
Remember that different insurance companies have their own coordination of benefits (COB) rules that can lead to OA-23 denials. Medicare, as a primary payor for seniors, requires strict EOB submission to secondary payors like Aetna, Cigna, Delta, and UnitedHealthcare, who may deny claims if the EOB lacks a claim ID.
Blue Cross Blue Shield often demands pre-authorization for secondary claims, like a $1,500 MRI, which can lead to denials if missed. Medicaid, which is mostly a primary insurance for low-income patients, can conflict with private plans like Mass Mutual and Allianz if patient eligibility isn’t updated.
There are situations where billers have to spend hours on resolving denials triggered by private or secondary insurers due to missing secondary plans of patients in their database. Checking payor-specific COB rules on insurance provider’s portals or partnering with clearinghouses can help avoid these mistakes. Moreover, periodic reviews of payor policies help your team stay ahead of the competition.
Tips for Resolving Denial Code 23
Is denial code OA-23 impacting your revenue by pulling your clean claim rate? Stress no more! We’ve gathered some doable and industry-tried and tested tips for resolving this mystery.
When you receive a denial for code 23:
- Contact the patient to verify their coverage details
- Resubmit the claim with the correct primary EOB attached
- Update the insurance info in your billing system if there’s been a recent change
- Use payor portals or clearinghouses to confirm what documentation is missing
If the issue persists, escalate the denial with detailed documentation and request a review or reconsideration from the insurance company. A smart biller working for I-Med Claims resolved 70% of OA-23 denials by calling the payor’s helpline and uploading EOBs directly to the insurer’s portal. Persistence pays off, but double-check all details before resubmitting to avoid repeat denials.
Resolving OA-23 denials requires persistence and close attention to detail. Start by calling the patient to confirm their insurance. We’ve seen many occasions where a patient forgets to mention a new plan, like switching from Berkshire Hathaway to Progressive.
Resubmitting with the correct EOB is the key; for example, a $1,800 claim for a hip injection (CPT 20610) was denied by Blue Cross Blue Shield because the Medicare EOB was missing. Updating EHR, with current insurance info, prevents repeat errors. Payor portals often show exactly what’s missing.
Take cue from there to upload EOBs fast. If denials keep happening, escalate to the payor’s reconsideration team with call logs and claim IDs. Consistently follow up with Insurance Provider’s helpline. Document every step in your billing software to build a paper trail for appeals.
Tools That Can Help
Modern billing platforms offer built-in checks for COB accuracy. To stay safe, you can use automated eligibility verification systems and clearinghouses to flag possible COB conflicts before claims go out. Some tools also integrate with payor databases, automatically fetching primary EOBs when available. Other valuable tools include:
- COB validation scripts
- EOB upload checklists
- Denial tracking dashboards
Investing in these technologies not only reduces OA-23 denials but also helps streamline your entire billing workflow. For smaller practices, outsourcing to third-party medical billing agencies can provide access to these tools without breaking the bank. Investing $5,000 annually in tech can save $20,000 in rework costs, says MGMA.
Training Your Team against COB Denials
Training is your secret weapon against OA-23 denials. AAPC and AHIMA offer COB-specific courses that teach billers how to identify primary vs. secondary payors. For instance, for retirees, Medicare is prioritized over employer health plans.
Scenarios where your staff have to manage patients with dual coverage, i.e., Medicare and Blue Cross Blue Shield, give them more exposure and allow them to handle issues amicably. At I-Med Claims, we conduct periodic training sessions for our medical billers and coders, helping them learn more about the problems and how to deal with them.
Our Coordination of Benefits training sessions, regular workshops using CMS resources, and industry-specific certifications allow our billing staff to sort out even the complicated matters in a sensible manner.
Their first aim is to ensure no denials happen, and if such a scenario arises, they’re perfectly capable of rectifying the mistakes and turning denials into approval, i.e., more revenue for your practice. At I-Med Claims, we know that a well-trained staff is your best chance to catch errors early, saving thousands in rework costs.
Final Words
Denial code OA-23 is used when a claim is denied due to prior payor adjudication. This typically happens in Coordination of Benefits scenarios when a patient has both primary and secondary insurance. If the claim is sent to the secondary payor without including the Explanation of Benefits (EOB) from the primary payor, or if that EOB is incorrect or incomplete, OA-23 is triggered. It’s not about how much was paid, but about providing full documentation of what the primary payor did.
Denial Code 23 is more than just a COB mix-up; it’s a sign of coordination gaps in your revenue cycle. For practices aiming to improve their first-pass resolution rates, tackling OA-23 starts with better insurance verification, clean claims, and ongoing staff education. Make COB accuracy a priority, and you’ll not only cut down denials but also speed up payments and reduce back-office stress.
Forget About COB Denials with I-Med Claims
Owing to our more than two decades of experience in streamlining and providing customized Revenue Cycle Management services to healthcare practices across the 50 states, I-Med Claims takes pride in the fact that we have some of the most experienced, professional, and certified billers who know COB and OA-23 denials inside out.
Their ability to ensure a smooth and seamless billing cycle not only enhances your income and minimizes revenue leaks but also keeps you safe from compliance challenges arising from the increasing denial rate. Consult us today if you want to strengthen your billing cycle and tackle the intricacies involved in COB denials.
