Knowledge Base Article

We hope our readers find our articles helpful in understanding the ins and outs of dealing with Medicare. We provide the latest updates on Medicare issues and dig deep into the more complex or unclear topics. Did you know all of our prior articles can be found under the Knowledge Base tab on our website at www.mmplusinc.com ? This page includes a search function that allows viewers to search by title, category, text keyword or date. One of our most popular prior articles, based on internet search traffic, is the “type of bill” article from 2014. Today, we are rerunning a slightly revised version of that article as a reminder of exactly what a type of bill is and the appropriate TOB for the various types and settings of healthcare.

A ‘type of bill’ designation is required on the institutional uniform billing form known as a UB-04 or CMS-1450. Chapter 25 of the Medicare Claims Processing Manual, section 70.1 describes the form as:

“… a uniform institutional provider bill suitable for use in billing multiple third party payers. Because it serves many payers, a particular payer may not need some data elements. The National Uniform Billing Committee (NUBC) maintains lists of approved coding for the form. Medicare Administrative Contractors servicing both Part A and Part B lines of business (A/B MACs (A) and (HHH)) responsible for receiving institutional claims also maintain lists of codes used by Medicare.”

The type of bill goes in field (FL) 4 on the UB-04. 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 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.