What is Bill Type in Medical Billing

Medical billing is very complex with 11,163 service codes, emerging technologies, new codes added on every year, and strict criteria for documentation and diagnosis codes. Adding to this cumbersome process is varied bill types for submitting service information to payers. Bill type plays a significant role in the reimbursement process for healthcare services.

By delving deeper into the structure and applications of bill types, you will gain a better understanding of their significance in medical billing. This, in turn, will enable you to maneuver through the complex billing process with greater ease and efficiency. So, let’s explore the world of bill types and their impact on the medical billing process.

Bill Types in Medical Billing

Bill types, also known as Type of Bill (TOB) codes, are four-digit alphanumeric codes that provide essential information about a claim on the UB-04 claim form or CMS-1450 claim form. These codes, found in field locator 4 on line 1, help categorize the claim based on the type of facility, the type of care provided, and the billing frequency. As a professional in the medical billing field, knowing how to accurately use and interpret TOB codes is crucial for facilitating smooth communication between healthcare providers and insurance companies.

Bill types are used to categorize claims based on the setting or type of care, such as hospital settings, outpatient clinics, and home healthcare facilities ¹.

Bill Types in Medical Billing

Using bill types helps in properly submitting claims to insurance companies, government agencies like Medicare and Medicaid, and other healthcare stakeholders. It is crucial for accurately defining the services, diagnosis, and procedures provided to the patient – using standardized codes like CPT (Current Procedural Terminology), HCPCS (Healthcare Common Procedure Coding System), and ICD-10 (International Classification of Diseases, Tenth Revision) ².

Best Professional Medical Billing and Coding Service in USA

Classification of Bill Types & Commonly Used Bills

Bill types are usually represented by a four-digit alphanumeric code. The first digit is a leading zero, which is ignored by CMS (Centers for Medicare & Medicaid Services) ³. The second digit classifies the type of facility, such as:

  • 1: Hospital
  • 2: Skilled Nursing Facility
  • 3: Home Health Agency
  • 4: Religious Non-medical Health Care Institution
  • 5: Clinic

The third and fourth digits provide information about the type of bill, such as whether it’s an admission, adjustment, or an interim claim.

For example, here’s a breakdown of some common bill types:

Bill TypeFacility TypeClaim Type
071XClinicRural Health Clinic
081XSpecial FacilityHospice (non-hospital-based)
32GXHome HealthHome health episode of care – adjustment
Classification of Bill Types & Commonly Used Bills

Different claims forms, such as the UB-04 or CMS-1500, use these bill types to provide a clear understanding of the medical services provided and streamline the billing process .

While there are numerous bill types used in medical billing, some of the most common ones include:

  1. UB-04 Bill Type: Used for institutional claims, such as those submitted by hospitals, skilled nursing facilities, and other inpatient providers. The UB-04 form includes fields for reporting various types of services, accommodations, and supplies provided to patients during their stay.
  2. CMS-1500 Bill Type: Used for professional claims, typically submitted by physicians, clinics, and other outpatient providers. The CMS-1500 form captures information about the services rendered during a patient’s visit, including procedures, diagnoses, and other pertinent details.
  3. Home Health Bill Types: Specifically designated bill types for home health services, including skilled nursing, physical therapy, and other home-based healthcare services. These bill types are used to report visits and services provided to patients in their homes.
  4. Durable Medical Equipment (DME) Bill Types: Used for claims involving the rental or purchase of durable medical equipment, such as wheelchairs, oxygen tanks, and prosthetic devices. DME bill types specify the type of equipment provided and any related services.

The Impact of Bill Type on Billing Processes

The Impact of Bill Type on Billing Processes

Bill types serve several important purposes:

  1. Claim Processing: Bill types help streamline the claim processing workflow by categorizing claims according to the type of service rendered. This classification ensures that claims are routed correctly and processed efficiently by payers.
  2. Reimbursement: Different bill types may be subject to varying reimbursement rates and payment methodologies. Understanding the bill type associated with a claim is crucial for determining the appropriate reimbursement amount.
  3. Compliance: Proper coding and billing practices, including accurate assignment of bill types, are essential for compliance with healthcare regulations and payer guidelines. Failure to use the correct bill type could result in claim denials, payment delays, or large payment recoupment.


In the complex world of medical billing, understanding bill types is essential for accurate claim submission, efficient reimbursement, and compliance with regulatory requirements. Healthcare providers, billing specialists, and other stakeholders must be well-versed in the various bill types relevant to their practice settings to ensure smooth financial operations and optimal patient care. By mastering bill types and adhering to best practices in coding and billing, healthcare organizations can navigate the complexities of the reimbursement process with confidence and precision.

Similar Posts