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N561 Remark Code: Bundled Episode Includes Readmission

N561 means the bundled claim you first submitted for an episode of care included related readmissions. The payer is telling you that you may resubmit the original claim to receive a corrected payment that reflects the readmission.

Code: N561 (RARC N561)
Status: Active In use since November 1, 2012.
Code set: Remittance Advice Remark Codes (RARC)
Group codes: CO (Contractual Obligation): The payment adjustment relates to the bundled episode rules. It is a provider-side matter and not billable to the patient.
OA (Other Adjustment): Some payers use OA for episode reconciliation adjustments. Treat it as an invitation to resubmit, not a final denial.
Official description: The bundled claim originally submitted for this episode of care includes related readmissions. You may resubmit the original claim to receive a corrected payment based on this readmission.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified: September 24, 2026 against the official X12 list.

What N561 means

Under an episode-based (bundled) payment, one claim covers a defined stretch of care. When a patient is readmitted for a related reason during that episode, the bundled payment may need recalculating. N561 tells you the payer noticed related readmissions within the episode you originally billed, and that resubmitting the original claim will let it issue a corrected payment.

This is different from a bundling edit on a procedure. Nothing is wrong with a code pair. The remark is about the scope of an episode. It commonly appears with CARC 249 (readmission) or CARC 132 (demonstration project adjustment).

Common causes

A readmission occurred within the episode window after the original bundled claim was paid.
The original claim’s dates or services did not reflect the readmission.
Separate readmission claims were processed and now need to be reconciled into the episode.

How to fix it

Identify the readmission the payer is referring to and confirm it falls within the episode dates.
Review the original bundled claim and decide what needs to change, such as dates, services, or charges, to reflect the full episode.
Submit a replacement claim with resubmission code 7 and the original claim number (box 22 on a CMS-1500, or the frequency code on an electronic claim), unless the payer instructs otherwise.
Compare the corrected payment to what you expected under the episode terms. An ERA analysis makes it easier to see the original payment, the reversal, and the new payment side by side.

How to prevent it

Hold final episode claims until the readmission window has closed where the program allows, and flag any readmission for patients with open episodes so the billing team knows the original claim may need updating.

Codes that may appear with N561

CO-249 (This claim has been identified as a readmission. (Use only with Group Code CO)): The claim was identified as a readmission; N561 explains that the bundled episode needs a corrected claim.
CO-132 (Prearranged demonstration project adjustment.): A prearranged demonstration project adjustment, used in bundled payment pilots.

N568 (Alert: Initial payment based on the Notice of Admission (NOA) under the Bundled Payment Model IV initiative.): Initial payment was based on the Notice of Admission under a bundled payment model.
N562 (The provider number of your incoming claim does not match the provider number on the processed Notice of Admission (NOA) for this bundled payment.): Provider number on the claim does not match the processed NOA.
N560 (The pilot program requires an interim or final claim within 60 days of the Notice of Admission.): The pilot required an interim or final claim within 60 days of the NOA.

N561 FAQ

Is N561 a denial?

Not exactly. It tells you the original payment did not account for a readmission within the episode and gives you a path to a corrected payment by resubmitting.

Do I send a new claim or a corrected one?

The official text says to resubmit the original claim. In most systems that means a replacement claim referencing the original claim number. Confirm the payer's preferred format first.

Does this apply outside bundled payment programs?

It was written for episode-based payment pilots. Outside those programs, readmission adjustments usually use other remark codes.

Important: read before using this information

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