Hospital Billing vs Professional Billing: What’s the Difference?

If you are willing to move your career in a billing and finance field of a healthcare industry, it is essential to explore and have the information about all the medical billing types and strategies. Prior to stepping into the healthcare billing world, you need to understand these two types and the difference between hospital billing vs professional billing clearly.

This is because billing and submitting claims have different categories and you need to grasp the essential knowledge to figure out what types of claims should be submitted under hospital billing or professional billing.

In other terms, professional billing is also referred to as ‘Physician billing’ and ‘institute billing’ is known as hospital billing. Also, both billing services fall under medical billing procedures.

Healthcare professionals involved in the billing sector have created these categories to better understand the billing procedures and to reduce the denials due to the complexity of the codes. Let’s dig more into knowing the difference between these two billing procedures.

Hospital billing vs professional billing

Hospital billing vs professional billing
  • Physician billing and its procedures

Physician billing, also known as professional billing is the process of submitting the claims for the procedures and medical services given by healthcare providers and physicians to get paid by the healthcare insurance. Physicians use the physician billing forms CMS-1500 or 837-P to claim the bills. For CMS-15600 is the paper form of billing, while the 836 is the electronic form to submit claims where there’s no difference in both forms.

Healthcare insurance companies like Medicare and Medicaid and some other companies only accept electronic submission of claims as a prerequisite of charging strategy. As mentioned, 837-P is the electronic version of the form CMS -1500 where ‘P’ stands for ‘professional’. In comparison, an expert in professional medical billing has more responsibilities than an expert submitting claims for institutional or hospital billing. This is because, in physician billing, some other managerial and administrative tasks are associated with greeting patients, registrations, check-in records, payment collection, and maintaining records.

The services that can be claimed under the physician billing everything about in-patients and out-patient services come under out-patient and in-patient services. However, both claims can only be billed only after the patient’s verification. Every healthcare insurance policy is different. This is why patient verification is necessary. This is also because there are a few things that fall under in and out-patient policies defined by most insurance companies.

It is also important to note that physician billing also involves medical billing that is based on complex medical coding. This translates to the fact that if you are a professional billing expert, you also need to understand the coding involved in medical billing procedures. On the other hand, in a hospital facility, medical billing experts and a separate coding team is hired to cater the billing activities as a daily task.

  • Hospital billing and its procedures

Hospital billing, which is also called institutional billing is based on the claims of in-patient and out-patient services provided by healthcare organizations and hospitals. In addition, in the hospital facility, the bills are claimed for the skilled nurses and the services provided by labs, medical supplies and equipment, radiology, and medical facilities, etc. to in-patient and out-patients.

To submit the claims, hospitals use the claim form UB-04 or 837- I. Here, UB-04 is the paper version and 837-I is the electronic form where there’s no difference between them. I in the 837-I refers to the configurations used for institutions.

Where the process of billing is the same for professional and hospital billing. The only thing that differentiates the two is the coding procedure. Hospital or institutional billing works only with the medical billing process and there’s no coding involved. Whereas, physician billing involves complex medical coding procedures. If adding the claims for skilled nurses, medical equipment, radiology, etc. Medical billing for institutions is more complicated than physician billing.

How to elevate revenues with hospital and physician billing?

How to elevate revenues with hospital and physician billing

There are many dissimilarities in revenue generation and reimbursement procedures for both medical and physician billing. However, the process of submitting claims in both billing domains plays a value-driven role in avoiding fraudulent claims and denials.

It should be the top priority of the physician’s biller to check and ensure that no claim or procedure bills are missed. Also, vigilance is also needed while submitting the claims that there are no coding errors. Errors can be other than coding as well such as technical errors or the updated billing guidelines. Many times, to avoid every type of error, physicians outsource billing services. Hospitals also consider outsourcing their claim filing process to avoid denials and errors.

Outsourcing billing service providers are experts in both institutional and physician billing processes. They also are the coding experts and remain aware of the billing updates that keep changing from federal institutions. They are highly recommended when physicians and hospitals want to cut the cost of hiring professionals and experts. Also, there would be a bigger revenue loss if the claims get denied.

Hospital billing has a higher number of claims; this is why they have a larger need for accurate billing to accomplish the collections and bill accordingly. Although institutional billing is much more difficult and more intricate than physician billing, this is why only experts are hired for the institutional billing service.

Types of medical billing systems

Types of medical billing systems

After knowing the categories, it is also important to understand the types of billing systems. The Healthcare industry has three types of medical systems for billing;

  • Closed

It is not allowed to make transfers in a closed medical billing system. Which means it is represented by only one practice. EMR – Electronic Medical Record is an example of a closed medical billing system.

  • Open

Allows transfers between healthcare facilities, professionals and practices, etc. HER – Electronic health record is an example of an open medical billing system.

  • Isolated

It is the third type of medical billing system but is no longer utilized in the healthcare industry. PHR – Personal health record is an example of an isolated medical billing system.

Hopefully, you have got all the information from the above-detailed discussion and sorted out the difference between hospital billing vs professional billing. Keep checking for more information on billing and services.