DENIAL CODES

Denial code N420

Remark code N420 indicates a claim payment adjustment due to a retroactive Coordination of Benefits or Third Party Liability Recovery.

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What is Denial Code N420

Remark code N420 indicates that the claim payment was adjusted retroactively by the payer due to a Coordination of Benefits or Third Party Liability Recovery.

Common Causes of RARC N420

Common causes of code N420 are incorrect patient coverage information initially provided, updates or changes in the patient's insurance coverage not communicated or updated in the billing system, errors in the initial claim submission regarding other insurance policies or liable parties, and adjustments following audits or reviews that identify other payers responsible for the claim.

Ways to Mitigate Denial Code N420

Ways to mitigate code N420 include implementing a robust verification process to accurately determine the primary and secondary payers before submitting claims. Regularly updating patient insurance information and ensuring that the billing team is aware of any changes in payer responsibilities can also help. Training staff to identify potential coordination of benefits (COB) issues and to proactively address them by communicating with payers and patients can prevent this code. Additionally, utilizing software that flags potential COB scenarios before claims submission can reduce the occurrence of N420. Establishing a clear protocol for managing third-party liability cases, including timely follow-up and documentation, is also crucial.

How to Address Denial Code N420

The steps to address code N420 involve a multi-faceted approach to ensure accurate claim resolution and reimbursement. Initially, review the patient's account to verify the coordination of benefits (COB) information is current and correctly documented. This includes confirming that the primary and secondary (if applicable) payers are accurately listed and that their payment responsibilities are correctly assigned.

Next, if the adjustment resulted in an underpayment, prepare and submit a detailed appeal to the payer, including any relevant documentation that supports the claim for additional payment. This documentation may consist of the original claim, the explanation of benefits (EOB) from both the primary and secondary payers, and any other pertinent information that substantiates the appeal.

Conversely, if the adjustment led to an overpayment, assess the need to refund the excess amount to the appropriate payer. Coordinate with your finance or billing department to process the refund promptly, ensuring compliance with payer policies and timelines to avoid potential penalties or interest charges.

Additionally, communicate with the involved parties, including the patient if necessary, to inform them of the adjustment and any actions being taken. This step is crucial to maintaining transparency and trust, especially if there is a possibility of out-of-pocket expenses changing for the patient.

Finally, use this occurrence as an opportunity to review and possibly update your internal processes for handling COB and third-party liability situations. This might involve training staff on the latest best practices for managing these cases or implementing new software tools that help streamline COB verification and claim submission processes. By taking proactive measures, you can minimize the likelihood of similar issues arising in the future and enhance overall revenue cycle efficiency.

CARCs Associated to RARC N420

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