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Formal vs. Informal Help Informal Formal

Submitter

Dan Voss

Description

If a secondary payer does not report the combination of a primary payer's payments and contractual adjustments as OA-23, automatic posting of contractual adjustments of the secondary payer is not possible. In these cases, the secondary payer will report the difference between the charged amount and the secondary payment amount as a contractual adjustment. When the secondary payor contractual adjustment is posted to the patient account, the patient account balance will be incorrect with a negative balance. Consider this scenario: Medicare is billed $500, Pays 300, PR01 for $75 and CO45 for $125. Patient balance is $75. Claim forwards to Medicaid. Medicaid pays $65 and CO45 for $435. Patient account balance is now -425. The appropriate way for this to be handled by Medicaid is: Medicaid pays $65, OA23 for $425 and CO45 for $10. The resulting patient account balance is now $0 as it should be. 1024 characters is not sufficient to illustrate this problem, please contact me so I can submit additional information.
1. If a secondary payer's adjudication is not impacted by the primary payer's adjudication, does the TR3 allow the secondary payer to report the combination of the primary payer's payment and contractual adjustments as an OA-23 adjustment so long as the remittance balances according to the balancing rules of an 835 transaction? If this reporting is allowable under the current TR3, is there any reason not to interpret the TR3 to require this reporting?
2. If a secondary payer is not required to report the combination of the Primary payer’s payment and contractual adjustments as an OA-23 adjustment, what business rules do X12 envision that patient account systems can implement to automatically post secondary contractual adjustments to the patient account with confidence that the patient account balance will be correct?
(additional details sent to the Work Group)

Submitter Assigned Keywords

secondary CAS OA-23

Response

Section 1.10.2.13 addresses this; specifically see Page 39 paragraph 2 as well as Item #3 for specific instructions related to the use of OA*23.

Business Example 3.3 also provides a clear example of considerations and calculating the amount for CARC 23 when the secondary payer takes into consideration the primary payer adjudication results (Note that the term "secondary payer" is used to indicate any payer that is subsequent to the primary payer).

Recommendation

Secondary payers are typically impacted by the prior payer's adjudication when that adjudication involves any payment or contractual reduction. This is because those actions reduce the payable balance of the claim/service. Therefore, every secondary payment should include a CAS segment reporting the OA*23 adjustment when the previous payer(s) made a payment or contractually reduced the claim/service.

There are also cases where the subsequent payer's OA*23 adjustment may not equal the sum of the previous payer(s) payments and contractual adjustments, however, one example is when the current payer is providing additional payment that negates/covers part or all of what the previous payers reduced.

All payers are encouraged to look at these requirements from the perspective of the processing by the provider, and delivering administrative simplification

There are many COB models across the industry so it is difficult to address all of the methods and assure the provider receives clear delineation of how to post to their system. The workgroup will continue to develop more encompassing solution.
Submission 10/10/2012
Status Date 1/18/2013
Status F - Final
Primary References
Document 005010X221
Section1.10.2
Set ID835
Table2
Loop2100
Segment IDCAS