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N420 Remark Code: Retro Adjustment for COB or TPL Recovery

N420 means the payment on this claim is the result of a retroactive adjustment for coordination of benefits (COB) or third party liability (TPL) recovery. The payer found another responsible party after paying and has adjusted the claim, often recovering some or all of its payment.

Quick facts

Code
N420 (RARC N420)
Status
Active In use since August 1, 2007.
Code set
Remittance Advice Remark Codes (RARC)
Group codes
  • OA (Other Adjustment): The adjustment reflects the effect of another payer or liable party. Pursue that party rather than treating the recouped amount as a write-off.
  • CO (Contractual Obligation): When shown as contractual, the provider generally cannot move the recovered amount to the patient and should bill the responsible payer instead.
Official description
Claim payment was the result of a payer's retroactive adjustment due to a Coordination of Benefits or Third Party Liability Recovery.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What N420 means

N420 explains a payment change after the fact. The payer originally paid the claim as if it were primary, then learned that another plan or a liable third party (for example, an auto insurer or a party responsible for an injury) should have paid first. It reprocessed the claim and the remittance now shows that retroactive adjustment.

Payers use N420 for two related activities:

  • Coordination of benefits: another health plan is primary.
  • Third party liability recovery: someone else, such as a liability or no-fault carrier, is responsible for the injury-related care.

How it shows up

Expect a reversal of the original payment and a reprocessed claim with a lower or zero payment, often with CARC 22, 23, or 215. The recouped amount may be offset against other claims on the same remittance.

What to do

  1. Identify the other party. Check the remittance, any accompanying letter, or call the payer to learn which plan or carrier it believes is responsible.
  2. Verify with the patient that the other coverage exists and was active on the date of service, and whether an accident or injury claim is involved.
  3. Bill the responsible payer with the correct order of benefits. For liability or no-fault cases, follow the carrier’s claim process and deadlines.
  4. Rebill this payer as secondary once the primary has processed, including the primary’s payment details.
  5. Dispute the recovery if the other coverage was not active or does not apply, with documentation such as a termination letter.
  6. Watch filing deadlines on the newly responsible payer. See timely filing denials.

How to prevent it

Ask about other insurance and accident-related care at every registration, not only the first. Update COB data in your system as soon as the patient reports a change. The root causes behind COB rework are covered in eligibility and COB denials.

Codes that may appear with N420

  • OA-22 (This care may be covered by another payer per coordination of benefits.): Another payer may be responsible under coordination of benefits.
  • OA-23 (The impact of prior payer(s) adjudication including payments and/or adjustments. (Use only with Group Code OA)): Shows the impact of a prior payer's adjudication once the correct order of benefits is applied.
  • CO-215 (Based on subrogation of a third party settlement): Adjustment based on subrogation of a third party settlement.
  • CO-20 (This injury/illness is covered by the liability carrier.): The injury or illness is covered by a liability carrier.
  • N419 (Claim payment was the result of a payer's retroactive adjustment due to a retroactive rate change.): A retroactive adjustment caused by a rate change rather than other coverage.
  • N421 (Claim payment was the result of a payer's retroactive adjustment due to a review organization decision.): A retroactive adjustment based on a review organization decision.
  • N4 (Missing/Incomplete/Invalid prior Insurance Carrier(s)): Requests the prior carrier's EOB, which you may need when rebilling this payer as secondary.

N420 FAQ

Why did the payer take back money months later?

It learned of other coverage or a liable third party after the claim paid. COB and TPL reviews can happen well after the date of service.

Can I bill the patient for the recouped amount?

Usually not right away. First bill the payer or party the plan identified as responsible. Patient responsibility depends on how that payer processes the claim and on your contracts.

What if the other coverage had ended?

Get proof of the termination date from the other payer or the patient and send it to the plan that recouped. It can reverse the adjustment if the COB information was wrong.