N420Remark Code (RARC)Active
N420 Remark Code - Retroactive Adjustment Explained
The N420 remark code indicates that the claim payment was adjusted retroactively by the payer due to Coordination of Benefits (COB) or Third Party Liability Recovery. This means that the payer has made changes to the payment amount based on previously undisclosed or updated information regarding other insurance coverage or liabilities.
How It Relates to the Denial
The N420 remark code typically accompanies a Claim Adjustment Reason Code that details the specific adjustment made to the payment. Its presence signals that the adjustment was influenced by the existence of other payers or liability claims that were not initially considered.
Common Scenarios
1A provider submits a claim for a patient who has multiple insurance policies. The payment received reflects adjustments made after discovering additional coverage.
→ Here, the N420 remark code explains that the payment adjustment was retroactive and relates to the coordination of benefits with the newly identified insurance.
2A claim for a service rendered to a patient is processed, but later the payer adjusts the payment based on recovery from a third-party liability case.
→ In this case, the N420 remark clarifies that the payment adjustment resulted from the payer's action related to the third-party liability recovery that affects the claim.
3A provider receives an 835 remittance indicating reduced payment for a service due to a previously unknown secondary insurance policy.
→ The N420 remark code here indicates that the reduced payment was the result of a retroactive adjustment stemming from the coordination of benefits with the secondary insurance.
What to Do
- Review the accompanying Claim Adjustment Reason Code for details on the adjustment.
- Ensure that any necessary adjustments are reflected in the billing records based on the new payment amount.
- If applicable, follow up with the patient regarding any changes in their insurance coverage that may affect future claims.
What to Check
- The original claim submission details for any indications of multiple payers.
- The payment history or remittance advice for documentation of the adjustment made by the payer.
- Any correspondence from the payer regarding changes in liability or coordination of benefits.