If you work in medical billing, the OA-23 denial code can feel like one of the most draining adjustments to deal with. I still remember opening ERAs early in the morning, seeing multiple OA-23 adjustments, and knowing that even though the claim was technically “processed,” the money was now stuck. The worst part is that OA-23 often shows up after everything was done correctly, the primary payer paid, documentation was complete, and yet the revenue cycle slowed down because of prior payer adjudication.
What makes OA-23 emotionally frustrating is the silent workload it creates. Billing teams spend hours rechecking COB, matching EOBs, explaining to providers why payments are delayed, and making sure patients are not incorrectly billed. Over time, these denials don’t just affect cash flow—they create burnout, pressure from management, and anxiety about compliance. That real-world frustration is exactly why understanding OA-23 properly is not optional—it’s necessary for survival in today’s billing environment.
OA 23 Denial Code: Complete Description
The OA 23 denial code, also called Claim Adjustment Code 23, appears when a claim denial occurs due to the impact of prior payer adjudication. In simple terms, another insurance payer has already reviewed the claim and applied payments or adjustments, which affects how the current payer processes reimbursement.
In daily billing work, I see this denial most often when multiple payers are involved, such as a primary insurance payer and a secondary payer. The secondary payer compares its allowable amount against what the primary already paid. If no additional reimbursement is owed, the remaining outstanding amount gets adjusted under Group Code OA (Other Adjustment).
On the electronic remittance advice (ERA) or explanation of benefits (EOB), OA 23 is reported as a Claim Adjustment Reason Code (CARC) with Claim Adjustment Group Code (CAGC) OA, indicating an administrative adjustment, not a processing error. The payer response reflects the claim processing outcome, not a missing submission.
OA 23 Denial Code Example (Real-World COB Scenario)
To understand OA 23 clearly, let’s walk through a real-world Coordination of Benefits scenario I’ve handled many times.
A patient has two insurance payers, Company A (primary insurance) and Company B (secondary insurance). The total bill for a procedure is $400. Company A applies a contractual adjustment of $250, sets the allowable amount at $150, pays $130, and assigns $20 coinsurance.
When the claim moves to Company B, its net allowed amount is only $10 after reviewing Company A’s adjudication. Since Company A already paid more than Company B’s allowable, the $10 balance denied appears as an OA 23 denial code.
I see the same pattern in Medicare and private plan coordination. For example, a cataract surgery (CPT 66984) billed at $1,500, where Medicare pays $1,000 as primary. The secondary payer (Cigna or Delta) reviews the EOB and denies the $500 balance under OA 23 because no additional payment is due. The same logic applies to knee arthroscopy (CPT 29881) claims.
Understanding Coordination of Benefits (COB) in OA-23
Coordination of Benefits (COB) is the foundation of the OA 23 denial code. COB determines the payor order, deciding which plan pays first and how the remaining balance is handled.
Problems arise when the billing order is wrong, the primary EOB is missing, or the COB sequence is not updated in the payer system. In my experience, incorrect COB setup between Medicare, Medicaid, employer plans, and private plans is the most common trigger for OA 23.
If a claim is submitted to a secondary payor without attaching the primary EOB, or if payer order conflicts exist in the COB process, the secondary insurer issues OA 23 automatically. This denial signals a coordination issue, not incorrect services.
COB Problems for Each Payor
Different insurance companies have different regulations for COB. Medicare is the main insurance for seniors, and Medicaid is often the main insurance for people with low incomes. Payers such as Aetna, Cigna, Delta, UnitedHealthcare, BCBS, Humana, Anthem, Mass Mutual, and Allianz have rigorous rules for EOBs and claim IDs.
Not following the rules for pre-authorization, especially for MRI claims, or not paying attention to updates on the payer site, might lead to OA 23 denials.
OA 23 Denial Code: Who Is Financially Responsible
People sometimes think that OA 23 is a billable denial; in most circumstances, the patient does not have to pay for it. This code shows a payer-to-payer adjudication adjustment, which means that the payer decided that no more money is owed.
In most cases, the provider pays for the modification unless the contract says otherwise. Once the quantities that are allowed are compared, the payer’s job is done. Billing patients is usually not allowed because OA 23 is not the patient’s duty under PR codes.
Financial Impact of OA-23 Denials on Medical Billing
OA 23 denials cause a major problem in the revenue cycle. Even though the payment procedure is accurate, denying payment means late reimbursement, canceled claims, and extra administrative expenditures.
The billing teams have to work extra hours to handle the claims, which leads to lower productivity, burnout, and possible violations of the law. Repeated OA 23 denials lower the clean claims rate, harm profits, and confuse patients about their outstanding balances, which raises overall financial stress.
Common Causes of OA 23 Denial Code
Most of the time, OA-23 denials are due to problems with processing claims and payer accountability, not concerns with clinical treatment. These denials usually mean that something was changed because of mistakes or inconsistencies earlier in the payment process.
Problems with payer processing and responsibility
- Mistake made by the previous payer
The primary insurer made a wrong payment or modification because of mistakes in math, misunderstanding the nature of the claim, or problems with the system.
- Conflicts with Coordination of Benefits (COB).
The payer order was not apparent, which led to the wrong decision.
- Contract discrepancies
Differences between provider–payer contract terms and claim processing rules.
Problems with coverage and Documentation
- Missing or incomplete documentation
The insurance company didn’t get the required supporting paperwork, which is against their rules. - Services that aren’t covered or are out of scope
Services that are not covered by policy, plan, or medical necessity.
- Mistakes in coding and submitting claims
Reported the wrong procedure or diagnostic codes.
- Modifiers that are missing or wrong
Modifiers that were needed to make services clear were left out or used incorrectly.
- Submitting a claim late
Claims that were sent in after the deadline.
- Claims that are the same
Submitting the same thing over and over without fixing problems from previous submissions.
Cost of OA-23 Denials
Industry data confirms the cost impact. MGMA estimates show $25–$100 rework cost per claim when denials occur. In a practice submitting 2,000 monthly claims, a 10% OA-23 denial rate can cost $5,000–$20,000 monthly.
I’ve personally seen a Texas hospital lose $50,000 in 2023 due to delayed resolution and write-offs. With 3 billion medical claims annually, and $43.48 clinical labor cost per claim, OA-23 contributes to nearly $19.7 billion in annual denial expenses.
How to Prevent OA-23 Denial Code
Prevention starts with eligibility and benefits verification at every patient encounter. Always confirm primary and secondary plan verification before services are rendered.
Accurate and complete documentation, including medical necessity and prior authorizations, prevents confusion. Attaching the primary EOB with secondary claims, ensuring timely claim submission, and following structured submission workflows reduces OA 23 risk.
I strongly recommend staff training on COB protocols, consistent payer policy monitoring, denial tracking, and the use of automation tools and claim scrubbing tools to catch COB conflicts before submission.
OA 23 Denial Code Management & Resolution
Effective management of denial requires active monitoring of claims and organized claim follow-up. Teams need to monitor the submitted claims, trace outstanding and unpaid claims, and perform internal reviews.
Early denial identification helps to protect revenues and avoid appeals related to the denial of adjudication in the past.
Step-by-Step Process to Fix OA-23 Denial Code
Issues of OA-23 denote a problem with payment or adjustment. Issues of this nature never signify errors of a medical or coding nature, but rather issues associated with payment or adjustment. They need to be solved by following a systematic procedure to analyze the payment process against the agreement terms.
- Examine the remittance advice (RA) and explanation of benefits (EOB)
Identify how the claim was handled by the payer and any corresponding modifications.
- Do a thorough examination of the adjudication.
Compare expected reimbursement vs actual payment or adjustments using contracted rates and fee schedules.
- Identify underpayments or disparities.
Flag incorrect reductions, miscalculations, or unexpected adjustments.
- Gather essential documentation
Collect medical records, claim copies, and any relevant billing documents, and review them to see if any information is missing. Contact the provider before submitting the claim to provide all the required information.
- Contact the insurance firm for clarification requests.
Request details on how the payment decision was determined by the insurance and any documentation that is needed.
- Submit a reconsideration or appeal if needed.
File within the payer’s resubmission deadline with complete documentation.
- Track appeal status and follow up consistently
Monitor progress and document all payer communications.
- Escalate when necessary
Involve higher-level payer contacts or an RCM specialist if resolution is delayed.
When to Fix and Resubmit vs When to Appeal OA-23
If the problem is missing EOBs, an erroneous COB sequence, or missing documentation, the best thing to do is to fix the problem and send it back. Appeals are appropriate only when there is clear proof of incorrect adjudication.
Appeals require a corrected claim, an appeal letter, claim ID, reference numbers, and submission within the 30-day or 60–180-day appeal window. Escalation should be the final step.
Documentation Requirements for OA-23 Denials
Having accurate medical records, primary payers EOB, claim and payment history, and communication records is imperative. I suggest COB updates every 90 days to prevent outdated insurance information.
The accuracy of documentation results in the prevention of recurrence of OA 23 problems.
OA-23 Denial Code vs Similar COB-Related Denials
OA-23 is not a coverage denial or patient responsibility code like OA-18, PR-96, or CO-97. It shows an administrative change because of allowed comparisons, not charges that aren’t covered or contractual responsibilities.
Conclusion
I can tell with confidence that OA-23 denials are manageable when handled the right way because I have worked directly with denial trends and payer guidelines for years. They have nothing to do with the quality of care given, and they don’t mean that billing attempts have failed. They are signals that coordination between payers, documentation flow, and claim sequencing must be handled with precision. Once teams stop reacting emotionally and start responding strategically, OA-23 becomes far less disruptive.
I’ve personally seen practices regain financial stability by mastering COB accuracy, educating staff, and knowing exactly when to correct, when to appeal, and when to accept an adjustment. When handled with expertise, OA-23 stops draining time and revenue. Rather, it becomes a mere operational adjustment in a well-managed revenue cycle. It is this confidence, the belief that you are compliant and in control, that makes the difference for the struggling biller and the successful one.
FAQs
What does the OA-23 denial code mean?
The OA-23 denial code means the claim was adjusted due to the impact of prior payer adjudication, including payments or adjustments already made by another insurance payer. It usually appears when a secondary payer determines that no additional reimbursement is owed after reviewing the primary payer’s EOB.
What does OA mean on an EOB?
On an Explanation of Benefits (EOB), OA stands for Other Adjustment. An administrative adjustment that is not PR and not CO. OA adjustments are usually related to either payer coordination or logic in the processing.
What is the reason code 23 for Medicaid?
Because Medicaid claims are considered a payer of last resort in most cases, reason code 23 means the same thing that CARC 23 does across payers, namely, that the claim is impacted by prior payer adjudication. This means some other insurance has already processed the claim, usually Medicare or a commercial plan, and Medicaid does not owe more.
What does OA denial mean?
OA denial means the adjustment is due to the processing between payers, not a billing error or patient responsibility. For this author, during practice, it has been noted that the usual issues regarding OA denials are COB issues, comparisons of allowable amount, and prior payments, none of which should be billed to the patient.
What is the 23 modifier used for?
The 23 modifier is in no way related to OA-23. Modifier 23 pertains to the anesthesia billing in case the provider has to do an unusual anesthesia, which requires considerably more effort because of complications. It serves an entirely different purpose and should not be confused with denial code 23.
What is an OA code?
An OA code is a claim adjustment group code standing for Other Adjustment. It groups adjustments that aren’t to be considered PR or contractual obligations. Usually, an OA code will have something to do with admin processing, COB logic, or prior payer actions.
