UB04 Condition Codes Code 05: Lien Has Been Filed

Overview

Condition Code 05, “Lien Has Been Filed,” is a standard UB-04 claim form indicator used to notify the payer that a legal lien has been placed against the patient’s potential settlement, judgment, or insurance proceeds. According to the Noridian Condition Codes list, code 05 is defined simply as “Lien has been filed.” ^[1] The MassHealth UB-04 Billing Guide provides general instructions for completing the UB-04 form, including the use of code sets for condition codes. ^[2] While the MassHealth guide does not specifically address code 05, it confirms that condition codes are part of the standard UB-04 data set and must be reported accurately to ensure proper claim processing.

When to Use

Condition Code 05 should be used when a lien has been filed against the patient’s potential recovery from a third party. The Noridian code list explicitly states that code 05 means “Lien has been filed.” ^[1] This typically occurs in scenarios such as automobile accidents, medical malpractice, or other liability cases where an attorney or healthcare provider has placed a lien on the patient’s settlement or judgment. Providers should apply code 05 only when they have documented evidence of a valid, filed lien—not merely a pending or informal claim. The MassHealth UB-04 Billing Guide emphasizes that condition codes must be completed accurately to reflect the patient’s billing situation. ^[2] Using code 05 informs the payer that the claim involves a third-party interest, which may require special handling, such as withholding payment until the lien is satisfied or coordinating with the lienholder. It is important to note that code 05 is distinct from code 02 (workers’ compensation) or code 03 (other insurance not reflected), as a lien represents a separate legal claim on proceeds rather than primary or secondary insurance coverage. Providers should consult their payer’s specific billing guidelines to ensure appropriate use.

Step-by-Step Claim Example

Consider a patient who was injured in a car accident and is receiving inpatient hospital services. The patient’s attorney has filed a lien against any future settlement to cover medical costs. The provider must submit a UB-04 claim to the patient’s health insurance. In fields 18–28 of the UB-04, the provider enters Condition Code 05 to indicate that a lien has been filed. ^[1] The MassHealth UB-04 Billing Guide outlines that condition codes are entered in these fields, and each code should be listed in the order of relevance. ^[2] For this example, the provider would place “05” in the first available condition code field (e.g., field 18). If other condition codes apply, such as code 02 for workers’ compensation (if applicable), they would be entered in subsequent fields. The rest of the UB-04 is completed as usual: patient demographics, provider information, dates of service, revenue codes, and charges. The provider must also attach any required documentation, such as a copy of the lien notice, to support the condition code. After submission, the payer processes the claim with the lien flag, which may trigger a hold on payment or a direct payment to the lienholder. This example demonstrates how code 05 integrates into the standard UB-04 workflow, ensuring that the lien is formally recognized during adjudication.

Common Mistakes & Audit Red Flags

One common mistake is using Condition Code 05 without a valid, filed lien. The Noridian code list defines code 05 strictly as “Lien has been filed,” meaning the lien must already be on record with a court or appropriate entity. ^[1] Using the code prematurely—for example, when a lien is only anticipated—can lead to claim denials or audits. Another error is failing to include supporting documentation. While the MassHealth UB-04 Billing Guide does not specify documentation for condition codes, it stresses that all claim data must be accurate and verifiable. ^[2] Payers may request a copy of the lien filing to validate the code. Providers should also avoid confusing code 05 with code 02 (workers’ compensation) or code 03 (other insurance), as each has a distinct meaning. An audit red flag arises when code 05 is used on claims where no third-party liability is expected, such as routine Medicare primary claims. This inconsistency may trigger a review for potential fraud or misrepresentation. Additionally, if a lien is later resolved or satisfied, providers must update the claim or submit a corrected claim to remove the condition code. Failure to do so can result in delayed payments or improper fund distribution. To mitigate risks, providers should maintain clear policies for when and how to apply condition codes, and train billing staff to verify lien documentation before submission.

Related Codes/Fields

The following table lists condition codes from the Noridian list that are commonly used alongside code 05, along with their meanings. All codes are entered in UB-04 fields 18–28. ^[1]

Code	Meaning	Notes
01	Military service related; coordinate with VA	Used when care is related to military service
02	Workers’ compensation / black lung	Injury or illness due to employment
03	Other insurance not reflected here	Patient has additional coverage not listed
04	Bill submitted for informational purposes only	No payment expected
05	Lien has been filed	Legal lien on patient’s recovery
06	ESRD patient in first 30 months with EGHP	Employer group health plan primary
07	Treatment of non-terminal condition for hospice patient	Hospice patient receiving non-hospice care
08	Beneficiary would not provide other insurance info	Patient refused to disclose coverage
09	Neither patient nor spouse is employed	No employer group health plan available
10	Patient/spouse employed but no EGHP	Employed but no group coverage

These codes may be used in combination with code 05 to fully describe the patient’s billing situation. For example, a patient with a lien (05) who also has workers’ compensation (02) would require both codes. Providers should refer to their payer’s specific instructions for field order and maximum number of codes allowed. ^[2]

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References

[1] Noridian Condition Codes — https://med.noridianmedicare.com/web/jea/topics/claim-submission/condition-codes

[2] MassHealth UB-04 Guide — https://www.mass.gov/doc/ub-04-billing-guide-0/download