OA-186: Level of Care Change Adjustment

What Does OA-186 Mean?

With OA (Other Adjustments), the level-of-care adjustment appeared during coordination of benefits. This may occur when primary and secondary payers have different determinations about the appropriate level of care.

CARC 186 appears when the payer downgrades the level of care on a claim after reviewing the clinical documentation. Rather than paying at the billed level (such as inpatient, ICU, or skilled nursing), the payer determined a lower level was medically appropriate — for example, observation instead of inpatient, step-down instead of ICU, or home health instead of skilled nursing.

This is a partial payment adjustment, not a full denial. The payer pays at the reduced level of care and denies the difference. Level-of-care downgrades are among the most impactful adjustments for hospitals and facilities because the payment difference between levels can be substantial. The most effective response is a clinical appeal with documentation supporting the billed level of care.

How to Resolve

1. Review each payer's level-of-care determination Compare the primary and secondary payer's assessments of the appropriate level of care.
2. Appeal to the appropriate payer If the level-of-care downgrade was applied incorrectly, appeal with clinical documentation to the payer that made the determination.
3. Submit the secondary claim with the primary EOB Ensure the secondary payer has the primary payer's EOB showing the level-of-care adjustment.

How to Prevent OA-186

• Obtain level-of-care authorizations from all payers in the coordination chain
• Document clinical justification that satisfies both primary and secondary payer criteria

Also Filed As

The same CARC 186 may appear with different Group Codes:

Related Denial Codes