Ashley Foster, aged 24, has admitted preventing the burial of Miss Bill's body but denies killing the 17-year-old, who was found dead at Highgate Road Hostel in Brierley Hill.
Miss Bills' body was discovered in one of several flats in the hostel, inside a double wardrobe wrapped in cling film.
Foster, who is unemployed and from Highgate Road, Brierley Hill, appeared at Wolverhampton Crown Court today where he pleaded guilty to preventing a burial but not guilty to murder.
He will next appear at court on October 6.
Det Insp Caroline Corfield, from West Midlands Police CID, said: "In the very early stages of this investigation Ashley Foster was charged with the offence of preventing a lawful burial.
"The investigation team has maintained close communication with the Crown Prosecution Service as the case has progressed and, following a recent review of the evidence, Foster has today been charged with the murder of Megan Bills.
"Megan’s family have been fully updated with this further development and our thoughts remain with them.
"The investigation continues and I again appeal for anyone who has any information they believe would assist the case to come forward."