Common Causes of Denial Code OA 23

Medical billing denials are a significant challenge for healthcare practices. Did you know that private payers initially deny 15% of medical claims? According to a national survey by Premier Inc., hospitals and healthcare systems spend an average of $438 per claim to dispute denials. With insurers reviewing nearly 3 billion claims annually, this results in a staggering $20 billion spent on denial reviews. The financial burden doesn’t stop there—handling denials takes up valuable staff time, diverting resources from patient care and creating additional administrative stress.

One of the most common denial codes healthcare providers encounter is OA 23. Understanding why it occurs and how to prevent it can save your practice time and money while improving cash flow.

What Is Denial Code OA 23?

Denial code OA 23 indicates that a claim was denied due to the impact of a prior payer’s adjudication, including payments or adjustments. This code is typically associated with the Claim Adjustment Group Code “OA” (Other Adjustment), which signifies that the denial is due to administrative adjustments rather than contractual obligations or patient responsibility.

When you receive this denial, reviewing your Electronic Remittance Advice (ERA) or Explanation of Benefits (EOB) will provide more details about the specific reason for the adjustment.

Common Causes of Denial Code OA 23

Incorrect Payment or Adjustment by a Prior Payer

If a previous insurance company incorrectly processes a claim—whether due to miscalculations, misinterpretations, or system glitches—it can lead to OA 23 denials.

Inadequate Documentation

Insufficient or inaccurate medical documentation can result in denials. Payers rely on supporting documents to verify the necessity and accuracy of billed services. Missing information can lead to claim rejections.

Incorrect Coding

Coding errors are among the most frequent reasons for claim denials. If the wrong procedure or diagnosis codes are used, the claim may not be processed correctly.

Non-Covered Services

If the billed service is not covered under the patient’s insurance plan, the claim will be denied with OA 23.

Coordination of Benefits (COB) Issues

When a patient has multiple insurance plans, coordination between payers is essential. If the primary payer does not process the claim correctly or secondary payer rules are not followed, denials can occur.

Timely Filing Limits

Most insurers have strict deadlines for claim submission. If a claim is submitted after the payer’s time limit, it may be denied under OA 23.

Duplicate Claims

Submitting the same claim multiple times without addressing the prior denial can lead to additional OA 23 rejections.

Contractual Agreements

If a claim is adjusted due to contractual agreements between the provider and the payer, it may result in this denial code.

How to Prevent and Resolve Denial Code OA 23

• Verify Prior Payer Adjudications: Ensure that payments and adjustments from prior payers are accurate before submitting secondary claims.
• Improve Documentation Accuracy: Train staff to provide complete and clear documentation to support claims.
• Conduct Regular Coding Audits: Validate that diagnosis and procedure codes are correct before submission.
• Review Insurance Coverage: Confirm coverage details before rendering services to avoid non-covered service denials.
• Coordinate Benefits Effectively: Ensure correct processing of primary and secondary insurance claims.
• Monitor Timely Filing Requirements: Keep track of filing deadlines and submit claims within the allowed timeframe.
• Use Claim Scrubbing Software: Implement automated tools to catch errors before submission.

By understanding and addressing the root causes of denial code OA 23, healthcare practices can reduce claim rejections, enhance revenue cycle efficiency, and allocate more resources to patient care.

For expert assistance in managing your practice’s revenue cycle, visit Svast Healthcare Technologies. Our team specializes in reducing claim denials and optimizing reimbursements for healthcare providers.