Corrected Claim vs. Appeal - Which Should You Submit?

After a medical claim has been processed, discovering a problem does not always mean the provider should submit a corrected claim. In some situations, the information submitted on the claim was correct and the provider instead disagrees with how the payer processed or adjudicated it.

This creates an important question to review: should the claim information be corrected, or should the payer's decision be reviewed?

A corrected claim generally changes information that was previously submitted incorrectly. An appeal, reconsideration or similar payer review process generally asks the payer to review a decision when the provider believes the claim should have been processed differently.

The appropriate process can vary by health plan, payer, program and provider contract. The information in this guide is intended to provide a general framework for understanding the differences, but the health plan's current requirements should always be followed for the specific claim and situation.

What Is a Corrected Medical Claim?

A corrected claim is generally submitted when information reported on a previously processed claim needs to be changed.

The correction could involve information at the claim level or service-line level, depending on the error and the health plan's requirements.

Examples of information that may need correction can include:

• patient or subscriber information
• provider information
• dates of service
• diagnosis information
• procedure or service information
• modifiers
• units
• charges
• other claim information that was submitted incorrectly

For an adjudicated professional claim, some health plans may require the corrected claim to be submitted as a Replacement Claim using Claim Frequency Type Code 7. Other requirements may apply depending on the payer.

For a detailed explanation of how corrected and replacement claims relate to one another, see our Corrected Claim vs. Replacement Claim: What's the Difference? guide.

What Is an Appeal?

An appeal generally asks a payer to review a claim determination or other adverse decision because the provider believes the decision should be changed.

Unlike a corrected claim, the purpose of an appeal is not necessarily to replace previously submitted claim information. Instead, the provider may be challenging how the payer interpreted, processed or adjudicated the information that was already submitted.

Depending on the health plan and the specific situation, examples could include disagreements involving:

• medical necessity determinations
• coverage or benefit determinations
• certain coding or payment decisions
• application of payer policies or contractual provisions
• other claim denials or adverse determinations that the provider believes should be reviewed

The Most Important Question: Was the Claim Information Wrong?

One useful way to begin evaluating the next step is to review the information that was originally submitted and compare it with the payer's claim determination.

Note: This distinction is intended as a general decision framework. Some health plans may require different processes depending on the denial reason, claim type, contract, program or stage of review.

Corrected Claim vs. Appeal Comparison

When Might a Corrected Claim Be Appropriate?

A corrected claim may be appropriate when the provider identifies incorrect or incomplete information on a claim that has already been processed and the health plan instructs the provider to correct the claim through its claim correction process.

For professional claims, a previously adjudicated claim that needs correction may require Claim Frequency Type Code 7 and the payer's original claim reference or claim control number. Exact requirements should always be verified with the health plan.

For more information about Code 7, see our Claim Frequency Type Code 7 - Replacement of Prior Claim Explained guide.

When Might an Appeal or Reconsideration Be Appropriate?

An appeal, reconsideration or other payer review process may be more appropriate when the provider believes the submitted claim information was correct but disagrees with the payer's decision.

The specific process may differ depending on the payer, denial reason, contract and type of determination. Providers should follow the instructions associated with the health plan and claim.

A Denied Claim Does Not Automatically Need a Corrected Claim

A common mistake is assuming that every denied claim should be corrected and resubmitted.

A denial tells you that the claim or service was adjudicated and some or all of the submitted charges were not approved for payment as billed. The denial itself does not necessarily mean that the information submitted on the claim was wrong.

For more information about how denials differ from claim rejections, see our Rejected Claim vs. Denied Claim: What's the Difference? guide.

What If the Claim Was Rejected Instead of Denied?

If the claim was rejected before adjudication, the corrected-claim-versus-appeal decision may not apply in the same way.

A rejected claim generally needs the reported rejection problem corrected before it can successfully proceed into adjudication. In many claim workflows, the corrected submission may be resubmitted as an Original Claim using Claim Frequency Type Code 1, rather than as a Code 7 replacement claim.

However, the exact resubmission method should always be determined from the health plan's or clearinghouse's current instructions for the specific rejection.

Corrected Claim, Reconsideration or Appeal?

One complication is that many health plans have more than two possible processes. A provider may encounter separate procedures for corrected claims, claim reconsiderations, disputes and formal appeals.

A general way to understand these processes is:

Important: These terms are not used identically by every health plan. Some payers may combine certain review processes, require reconsideration before an appeal, use multiple appeal levels or use different terminology entirely. Always follow the health plan's current process.

Should You Submit Both a Corrected Claim and an Appeal?

Do not assume that submitting both processes at the same time is appropriate.

If the health plan requires a corrected claim for billing errors, submitting the issue through an appeal channel may not follow the payer's required process. Likewise, repeatedly submitting corrected claims may not resolve a disagreement that the health plan requires to be handled through reconsideration, dispute or appeal.

Before submitting either process, review:

• what caused the original claim outcome
• whether information on the claim needs to change
• whether the provider is instead challenging the payer's decision
• which process the health plan requires for that situation
• what documentation must accompany the request
• what submission method is required
• what filing deadline applies

Do Corrected Claims and Appeals Have Filing Deadlines?

Corrected claims, reconsiderations, disputes and appeals can each have filing requirements and deadlines. The time allowed can vary by health plan, program, provider contract and type of request.

Do not assume that the deadline for submitting a corrected claim is the same as the deadline for requesting reconsideration or filing an appeal.

What Information May Be Needed for an Appeal?

The information required for an appeal depends on the health plan and the reason for the request. Providers should review the payer's current instructions before submitting documentation.

Depending on the situation, a health plan may request information such as:

• the payer's claim number
• patient and provider information
• an explanation of why the determination is being disputed
• remittance or claim-processing information
• medical records
• authorization information
• supporting clinical or billing documentation
• other documentation relevant to the disputed determination

Requirements can differ substantially by payer and type of appeal. The health plan's instructions should be used to determine what information is required and how it should be submitted.

Corrected Claim vs. Appeal Examples

The following examples illustrate common situations, but the appropriate process should always be confirmed with the health plan.

Example 1: Incorrect Modifier

A claim was adjudicated, but the provider discovers that an incorrect modifier was submitted.

Process to review: The health plan's corrected/replacement claim requirements because the information originally submitted may need to change.

Example 2: Incorrect Date of Service

A claim was adjudicated with an incorrect date of service that was entered during claim preparation.

Process to review: The health plan's corrected/replacement claim process because the claim information itself may need correction.

Example 3: Medical Necessity Denial

The claim contains the intended information, but the payer denies the service based on a medical necessity determination. The provider believes documentation supports coverage of the service.

Process to review: The health plan's current reconsideration, dispute or appeal procedures and applicable documentation requirements.

Example 4: Provider Disagrees With a Payment Decision

The provider believes the claim was submitted correctly but disagrees with how the payer applied a payment or claim-processing rule.

Process to review: The health plan's claim dispute, reconsideration or appeal process rather than automatically changing and replacing the claim.

Example 5: Claim Rejected Before Adjudication

A claim never successfully proceeds into adjudication because required claim information is invalid.

Process to review: The rejection should generally be corrected according to the health plan's or clearinghouse's instructions. The corrected claim may often be resubmitted as an Original Claim using Code 1, but payer-specific requirements should be confirmed before resubmission.

Common Corrected Claim and Appeal Mistakes

A Simple Decision Framework

The following questions can help identify which health plan process should be reviewed. They are intended as a general starting point, not a substitute for payer-specific guidance.

Frequently Asked Questions

Important: Corrected claim, replacement claim, reconsideration, dispute and appeal procedures can vary by health plan, payer, program and provider contract. The examples and decision framework in this guide are intended only as general educational guidance. Always follow the health plan's current billing, claim correction, reconsideration and appeal requirements for the specific claim and situation.

For technical requirements related to electronic professional claim submissions using the X12 837P transaction, refer to the official implementation guides published by X12.