Hospital billing services for facility claims on the UB-04

What does hospital and facility billing cover?

It covers everything between a patient's charges and the payer's final payment on the institutional claim: claim preparation, revenue-code validation, submission, payment reconciliation and denial management for inpatient, outpatient and emergency care. We can also bill the matching professional claims on the CMS-1500.

We work in the systems you already have. We align each EHR, clearinghouse and payer portal workflow with verified team experience, standard claim validation, reconciliation controls and performance monitoring.

What is a UB-04 and who files it?

The UB-04, also called Form CMS-1450, is the uniform institutional bill that hospitals and other facilities use to bill several payers. In the Medicare Claims Processing Manual, Chapter 25, CMS describes it as "a uniform institutional provider bill suitable for use in billing multiple third party payers." The facility files it, not the physician.

A UB-04 reports charges by revenue code, not by CPT code alone. Each line carries a revenue code in FL 42 that explains the charge in FL 47, and outpatient lines add the HCPCS code in FL 44. Our guide to revenue and condition codes on the UB-04 lists the code families.

What is the difference between facility billing and professional billing?

Facility billing charges for the hospital's resources: the room, nursing, supplies, imaging equipment and the department. Professional billing charges for the physician's own work. The first goes on the UB-04, the second on the CMS-1500. CMS states that providers sending professional and supplier claims to Medicare on paper must use Form CMS-1500. Our medical billing service covers the professional side.

Who bills for ER visits: the hospital, the physician group, or both?

Both bill, on separate claims. The hospital bills the facility fee on the UB-04, and the emergency physician group bills its professional fee on the CMS-1500. Each gets its own payment, so a patient can receive two bills for one visit.

CMS Claims Processing Manual Chapter 4, section 160, says hospitals bill Type A emergency department visits with the CPT emergency department E/M codes, and Type B visits with the HCPCS G-codes for Type B departments.

Procedures done in the ER need care. Chapter 4 requires a separate charge for the ER visit and for any surgical procedure, and the procedure is billed with the emergency room revenue code. CMS's own example uses revenue code 0450 on both lines. See revenue code 0450.

Which UB-04 fields do you check before a claim goes out?

We check bill type, revenue codes, patient status, condition and occurrence codes, authorization requirements and payer-specific rules. Each maps to a form locator.

Code values for Medicare come from your MAC and the NUBC's Official UB-04 Data Specifications Manual. Commercial payers add their own edits.

How are inpatient and outpatient facility claims paid differently?

Medicare pays an inpatient stay at a rate per discharge based on the MS-DRG, and pays outpatient services by APC group. So an inpatient claim is priced once for the whole stay, while an outpatient claim can earn several payments for one day.

CMS Claims Processing Manual Chapter 3, section 20.2.2, says the A/B MAC pays inpatient hospital services "on the basis of a rate per discharge that varies according to the MS-DRG." The GROUPER software assigns that MS-DRG from the diagnoses, procedures, age, sex and the discharge destination, which is the patient status code on the claim. A wrong status code can change the DRG or trigger a transfer payment.

Outpatient claims work differently. Chapter 4, section 10.2, explains that each HCPCS code paid separately under the OPPS is assigned to an APC, and a hospital may receive a number of APC payments for the services on a single day. Multiple surgical procedures on one day are subject to discounting.

How do you handle the 3-day payment window and the two-midnight rule?

We check both before the inpatient claim is final. The 3-day payment window folds certain outpatient services into the inpatient bill, and the two-midnight benchmark decides whether an inpatient admission is generally appropriate for Medicare Part A payment.

The 3-day payment window

Under CMS Claims Processing Manual Chapter 3, section 40.3, diagnostic services given by the admitting hospital, or an entity it wholly owns or operates, within 3 days before and including the admission date are deemed inpatient services and included in the inpatient payment. Related nondiagnostic services are included too, under 42 CFR 412.2(c)(5), unless the hospital attests they are unrelated.

For hospitals excluded from IPPS (psychiatric, inpatient rehabilitation, long-term care, children's and cancer hospitals) the window is 1 day. It does not apply to a critical access hospital, and ambulance and maintenance renal dialysis are carved out. We check every outpatient bill dated in the span before admission.

The two-midnight rule

Under 42 CFR 412.3(d)(1), an inpatient admission is generally appropriate for payment under Part A when the admitting physician expects the patient to need hospital care that crosses two midnights. Section 412.3(a) and (c) require an order for inpatient admission from a qualified practitioner with admitting privileges, furnished at or before the time of admission.

When utilization review finds before billing that an admission did not meet inpatient criteria, Chapter 1, section 50.3.2, lets the hospital bill outpatient on a 13X or 85X bill with condition code 44, reported in the condition code fields (FL 18 to 28 on the UB-04, per chapter 25). The responsible practitioner and the utilization review committee must concur and document it, and the inpatient claim must not yet have gone to Medicare.

Which revenue codes and bill types most often cause facility claim rejections?

Common causes are a bill type that does not match the service, a revenue code that does not fit the HCPCS code on the line, a missing line item date, and a frequency digit that does not match the claim's history. We catch each one before submission.

• Bill type and frequency. A replacement sent as an original, or an interim bill sent as final, will not match what the payer holds. Chapter 1 uses 112 for a first interim inpatient bill and 117 for later replacements.
• Revenue code and HCPCS mismatch. FL 42 explains the charge in FL 47, and on outpatient claims FL 44 carries the procedure. A charge under the wrong revenue code can reject or price incorrectly.
• Missing line item dates. Chapter 25 requires a line item date of service for every iteration of every revenue code on outpatient bills such as 013X and 085X.
• Condition and occurrence codes. Occurrence codes are required when a condition code applies, and occurrence and occurrence span codes are mutually exclusive.

What happens when a facility claim is denied for missing authorization?

The payer returns claim adjustment reason code (CARC) 197, which X12 defines as "Precertification/authorization/notification/pre-treatment absent." We pull the authorization history, find whether a number was issued or can be obtained retroactively, and appeal with proof.

How do you reconcile payer payments against the expected reimbursement?

We compare each payment on the ERA to what the contract, fee schedule or Medicare pricing says the claim should pay, line by line. Any gap is either a patient balance, a contractual adjustment we agree with, or an underpayment we dispute.

How we handle hospital and facility billing

Charges reach us after charge entry, automated eligibility checks run, and multiple claim scrubbing rules cover bill type, revenue codes, patient status, condition and occurrence codes and payer-specific edits before submission. Our team has billed for US practices since 2018 and includes AAPC and AHIMA certified coders.

We sign a Business Associate Agreement with every client, and all staff have HIPAA training and NDAs. For fee structure, see pricing. To talk through your facility claims, book a call.