OA-90: Ingredient Cost Adjustment
The ingredient cost balance is flagged for the secondary payer. Forward with the primary ERA and drug documentation.
What Does OA-90 Mean?
OA-90 appears in coordination of benefits situations where the primary payer's ingredient cost adjustment is passed to the secondary payer. The secondary payer will evaluate the drug charge under its own formulary and pricing rules.
CARC 90 appears on remittances when the payer adjusts the ingredient cost of a pharmaceutical claim. This means the payer recalculated what it will pay for the drug itself — separate from dispensing fees or administration charges — and the adjusted amount differs from what the provider billed.
Drug ingredient cost adjustments are driven by the payer's contracted pricing methodology. Medicare and many commercial payers reimburse drugs based on Average Sales Price (ASP) plus a margin, Average Wholesale Price (AWP) minus a discount, or Maximum Allowable Cost (MAC) for generics. When the provider bills at acquisition cost or usual and customary pricing and that amount exceeds the payer's contracted rate, CARC 90 captures the difference.
The code most commonly appears with Group Code CO, making the ingredient cost gap a contractual write-off for the provider. However, PR-90 is also significant — it appears when a patient is responsible for the cost differential between a dispensed drug and a lower-cost formulary alternative. A patient who receives a brand-name drug when a generic is available may see PR-90 for the cost difference.
OA-90 surfaces in coordination of benefits situations. Regardless of group code, the first step in resolving CARC 90 is verifying that the correct HCPCS code and NDC were submitted, since a wrong drug code can trigger an incorrect ingredient cost calculation. After confirming coding accuracy, compare the billed amount against the payer's known pricing methodology to determine if the adjustment is correct.
Common Causes
| Cause | Frequency |
|---|---|
| Coordination of benefits ingredient cost adjustment In multi-payer situations, the primary payer's ingredient cost adjustment is passed to the secondary payer under OA for evaluation | Most Common |
How to Resolve
Verify drug coding (HCPCS/NDC) and pricing against the payer's contracted ingredient cost methodology, then correct errors and resubmit or post the adjustment.
- Submit to the secondary payer File a secondary claim with the primary ERA showing the OA-90 adjustment. Include the NDC, HCPCS code, and all drug documentation.
- Process the secondary ERA Review the secondary adjudication and post any payment or remaining adjustment.
This adjustment is typically correct as processed. Review the specific circumstances before taking further action.
How to Prevent OA-90
- Verify all insurance coverage at registration for proper COB sequencing
- Automate secondary claim submission when OA adjustments appear on primary remittances
General Prevention
- Verify all insurance coverage at registration for proper coordination of benefits sequencing
- Automate secondary claim workflows when OA adjustments appear on primary remittances
Also Filed As
The same CARC 90 may appear with different Group Codes: