Knowledge Base Article

As a young laboratory manager, I was unwittingly thrust into an environment that required some knowledge of medical billing. One of my now best friends, then hospital billing manager, could almost bring me to tears with intimidating terms such as “UB”, “revenue code” and “type of bill.”   We now laugh about the time I told her, “I don’t know what a revenue code is and I don’t ever want to know!” Just goes to show you – never say never.

There have been a lot of hospital issues lately involving type of bill (TOB). There were instructions, then changed instructions, on the use of bill types 13x and 14x for laboratory services under the new OPPS packaging rules. The new Part B inpatient claim rules focus on type of bill 12x. So I thought this would be a good time to review some basic information on medical claim type of bill, even if you think you don’t want to know.

Type of bill consists of four digits, the first digit being zero. This leading zero is ignored by Medicare for processing and is usually dropped when discussing bill types. The type of bill goes in FL 4 on the UB-04. The second digit identifies the type of facility and the third classifies the type of care being billed. For example, claims with a second digit of “1” are hospital claims, such as 011x or 013x.

The fourth digit of the TOB indicates the sequence of the bill for a specific episode of care as defined below:

• “0” indicates a non-payment/zero claim. For example, if a facility determines an inpatient admission is not medically necessary after discharge, they would first submit a no-pay/provider liable inpatient claim, a 110 TOB. After denial, they would then submit a Part B inpatient claim (TOB 121) to receive payment for the Part B services furnished.
• “1” is for an admit-through-discharge claim.
• “2” is the first interim claim in a series of claim when the patient is expected to remain in a facility for an extended period of time or is receiving outpatient recurring services, such as physical therapy.
• “3” is a continuing claim in a series of claims.
• “4” indicates the last claim in a series.
• “5” is used as the last digit for late charges only claims.
• “7” is a replacement claim to be used when a previously finalized claim needs to be rebilled entirely such as corrected or adjustment claims.
• “8” is used to cancel a claim.

There are some additional fourth characters for special providers such as hospice and home health.

As usual with Medicare, nothing is as straight forward as it seems. Be sure to read the Medicare manual and other resources to ensure you are using the type of bill codes correctly. For example, Medicare Claims Processing Manual, Chapter 1, section 50.2 discusses Frequency of Billing for Providers.