CO-306: Type of Bill Inconsistent with Patient Status
Correct the type of bill or patient status code on the claim and resubmit. Do not collect from the patient.
What Does CO-306 Mean?
The provider's billing error caused the TOB/patient status mismatch. The provider must correct and resubmit the claim and cannot collect from the patient.
CARC 306 is triggered when the payer's automated edits detect a conflict between the type of bill (TOB) code and the patient status code on a UB-04 institutional claim. These two fields must be logically consistent — for example, an inpatient type of bill should correspond to an inpatient patient status, and a discharge status indicating transfer should be supported by the appropriate TOB frequency code.
Common mismatches include billing inpatient services when the patient was actually in observation or outpatient status, using a replacement claim frequency code on an original submission, or submitting a transfer TOB without a corresponding transfer discharge status. This denial requires the provider to review and correct the claim data before resubmitting.
Common Causes
| Cause | Frequency |
|---|---|
| Incorrect type of bill code on UB-04 The type of bill (TOB) submitted on the institutional claim does not match the patient's actual status (inpatient vs outpatient, admit/discharge status) | Most Common |
| Patient status code mismatch The patient status code (field 17 on UB-04) conflicts with the type of bill — for example, a discharge status indicating transfer but the TOB does not reflect a transfer claim | Most Common |
| Inpatient/outpatient classification error Services billed as inpatient when the patient was outpatient or observation, or vice versa | Common |
| Claim frequency code error The frequency code (3rd digit of TOB) does not match the claim type — for example, using a replacement claim frequency on an original submission | Common |
| Admission type mismatch The admission type on the claim is inconsistent with the type of bill and patient status combination | Occasional |
How to Resolve
- Review the UB-04 claim form to identify the type of bill code and patient status code submitted
- Verify the patient's actual status (inpatient, outpatient, observation) from medical records
- Correct the type of bill code or patient status code to reflect the actual patient status
- Ensure the frequency code (3rd digit of TOB) is appropriate for the claim type
- Resubmit the corrected claim to the payer
Appeal if the type of bill and patient status were submitted correctly. Include the UB-04 claim form showing the correct TOB and patient status, along with medical records supporting the patient classification. Reference CMS billing guidelines for the specific TOB code used.
Common RARC Pairings
The RARC code tells you exactly what triggered the CO-306:
| RARC | Description |
|---|---|
| MA130 | Your claim contains incomplete and/or invalid information. Review the type of bill and patient status fields on the UB-04 for inconsistencies → |
| M77 | Missing/incomplete/invalid place of service. Verify the facility type and patient status match on the institutional claim → |
How to Prevent CO-306
- Implement pre-submission claim scrubbing that validates type of bill against patient status codes
- Train billing staff on proper type of bill code selection based on patient classification
- Verify patient status (inpatient, outpatient, observation) before claim submission
- Use reference guides for TOB code selection to ensure consistency with patient status
- Conduct regular audits of institutional claims for TOB/patient status alignment
Also Filed As
The same CARC 306 may appear with different Group Codes:
Related Denial Codes
Sources
- https://x12.org/codes/claim-adjustment-reason-codes
- https://www.cms.gov/medicare/payment/prospective-payment-systems
- https://med.noridianmedicare.com/web/jeb/topics/claim-submission/denial-resolution
- Codes maintained by X12. Visit x12.org for official definitions.