Corrected Claim vs. Replacement Claim

The terms corrected claim and replacement claim are often used together in medical billing. In many billing workflows, a corrected claim is submitted as a replacement of a previously adjudicated claim.

The important distinction is whether the earlier submission was actually adjudicated. If a claim was rejected before adjudication, the error is generally corrected and the claim is resubmitted as an original claim. If the payer already adjudicated the claim and information on that claim needs to be changed, the corrected claim is typically submitted as a replacement claim.

For professional claims, a replacement of a prior claim is commonly identified using Claim Frequency Type Code 7 (Replacement).

What Is a Corrected Claim?

A corrected claim generally refers to a claim being submitted again because information on a previously adjudicated claim needs to be changed.

Examples of information that might need correction can include:

• patient or subscriber information
• provider information
• diagnosis information
• dates of service
• procedure or service information
• charges or units
• other information that was reported incorrectly on the prior claim

When the payer requires the corrected claim to replace the previously adjudicated claim, the new submission is generally sent as a replacement claim.

What Is a Replacement Claim?

A replacement claim is submitted when information on a previously adjudicated claim needs to be changed and the payer requires a new claim to replace the prior claim.

The replacement submission allows the payer to associate the corrected claim with the claim that was previously processed.

For professional claims, that identification commonly includes the payer-assigned claim control number or original reference number.

Claim Frequency Type Code 7 identifies the submission as a replacement of a prior claim. Exact replacement requirements can vary by payer, so providers should review the payer's current correction and resubmission instructions before filing the replacement.

How Are Corrected and Replacement Claims Related?

In everyday billing terminology, corrected claim describes the fact that information on a previously adjudicated claim needs to be corrected. Replacement claim describes the submission being used to replace that prior claim.

Because of this relationship, the terms are often used together as corrected/replacement claim.

When Is a Corrected Claim Submitted as a Replacement?

A corrected claim is typically submitted as a replacement when the payer has already adjudicated the prior claim and information reported on that claim needs to be changed.

For example, assume a provider submits an original claim and the payer adjudicates it. The provider later discovers that information submitted on the claim was incorrect.

The replacement submission tells the payer that the new claim is associated with an existing adjudicated claim and is intended to replace it.

What Happens When a Claim Is Rejected Before Adjudication?

A rejected claim is different from a corrected/replacement claim because the payer generally did not successfully adjudicate the rejected submission.

A rejection may occur during front-end validation, clearinghouse processing or payer claim acceptance. For example, a claim may be rejected because required information is missing or invalid.

If the rejection is identified on a 277CA or another payer or clearinghouse report and the claim did not successfully enter or complete adjudication, the provider will typically correct the reported error and resubmit the claim as an original claim.

Rejected Claim vs. Corrected/Replacement Claim

Note: This table provides a general distinction. Payer and program requirements can vary, so always review the payer's current instructions before resubmitting a rejected or adjudicated claim.

Why Not Use Claim Frequency Type Code 7 for a Rejected Claim?

Claim Frequency Type Code 7 identifies a replacement of a prior claim. If the previous submission was rejected before adjudication, there may be no adjudicated payer claim to replace.

In that situation, the provider is generally correcting the error that prevented the original claim from being successfully accepted for adjudication and then submitting the claim again as an original claim.

Why Not Submit Another Original Claim After Adjudication?

The opposite issue can occur when a claim has already been adjudicated.

If the payer has processed the claim and the provider later discovers that information needs to be corrected, sending another Claim Frequency Type Code 1 (Original) may cause the new submission to appear to be an additional claim rather than a correction to the prior claim.

Depending on the payer and claim information, this may result in duplicate claim processing or rejection.

What Information Identifies the Prior Claim?

When submitting a replacement claim, the payer needs a way to determine which adjudicated claim is being replaced. This commonly involves:

• Claim Frequency Type Code 7 – identifies the submission as a replacement of a prior claim; and
• Original Reference Number / Payer Claim Control Number – identifies the specific prior claim within the payer's system.

For professional claims submitted using the HCFA-1500/CMS-1500 form, this information is associated with Box 22 - Resubmission Code and Original Reference Number.

Does a Replacement Claim Contain Only the Corrected Information?

A replacement claim should not generally be thought of as transmitting only the individual field or service line that changed. The purpose of the replacement is to provide the payer with the claim information that should replace the prior adjudicated claim.

For that reason, payers commonly expect a replacement submission to contain the complete claim with the appropriate corrected information rather than only the item that changed.

Exact replacement requirements can vary by payer and program. Always verify whether the payer requires the complete corrected claim, specific supporting documentation or another correction process.

Corrected/Replacement Claim or Appeal?

Not every problem with an adjudicated claim should be corrected by changing and replacing the claim.

If information submitted on the claim was incorrect, a corrected/replacement claim may be appropriate. If the information submitted was correct but the provider disagrees with how the payer adjudicated the claim, the payer may instead require a reconsideration or appeal.

How Corrected and Replacement Claims Fit Into the Claim Lifecycle

A corrected/replacement claim is only one possible action after an original claim has been submitted. The correct next step depends largely on whether the previous submission was rejected, adjudicated or needs to be canceled.

Frequently Asked Questions

Important: Claim correction and replacement procedures can vary by payer and program. The information in this guide provides a general overview and should be used together with the payer's current billing and claim submission requirements.

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