Hospital and professional billing are a part of medical billing, but both are used in different settings and for different services. This guide will break down the key differences between hospital billing and professional billing and how they can be used in combination in different scenarios.
What’s more? Both professional billing and hospital billing services have their unique challenges that we will dive into. To help you overcome the challenge and win over the healthcare space with quick reimbursements, we will introduce you to the ultimate billing solution.
So, let’s get started!
- Professional Billing
- Hospital Billing
- Key Differences: Hospital Billing vs Professional Billing
- Collaboration: Hospital Billing & Professional Billing
- Types of Claims for Professional and Hospital Billing
- Challenges of Hospital Billing
- Challenges of Professional Billing
- MediBill MD – The Ultimate Solution to Medical Billing Setbacks
Professional Billing
Professional billing refers to the claim charges when a healthcare provider or other qualified healthcare professional provides care services or treatments to patients with health insurance. It is also known as physician billing.
This type of billing governs various integral activities related to medical offices, such as patient information verification, registration, appointment scheduling, and payment processing.
Hospital Billing
Hospital billing refers to claims charges for inpatient and outpatient services rendered by hospitals or other healthcare organizations. It is also known as institutional billing.
It covers professional nursing services as well. Hospital billing includes charges for medical services like medical supplies, imaging, laboratory, and equipment. Occasionally, hospital billers perform activities that differ from those of professional billers.
Outsource Hospital Billing to MediBill MD
Key Differences: Hospital Billing vs Professional Billing
Professional billing is restricted to services rendered by one or more physicians. Contrarily, hospital-based billing includes all costs associated with interventions and administration while the patient is treated in a hospital or outpatient emergency room.
| Differences | Hospital Billing | Professional Billing |
|---|---|---|
| Service Scope | It involves a wide range of services, such as accommodation, facilities, and resources. | It is directly related to the healthcare services provided by healthcare professionals. |
| Billing Entities | Hospitals carry out hospital billing. It reflects the medical services rendered within its facility. | Individual physicians or practice groups carry out the professional billing process. |
| Billing Codes | It uses codes to represent care services performed within the hospital premises, including supplies, room charges, and support services. | It uses codes to charge for consultations, medical procedures, and other interventions provided/performed. |
| Expertise Focus | It handles complex billing for all rendered care services in a hospital setting, including emergency room (ER) visits, inpatient and outpatient services, surgeries, etc. | It involves recognizing the physician’s skills and medical expertise outside a hospital setting, such as professional judgment, etc. It addresses a limited range of services compared to hospitals. |
Collaboration: Hospital Billing & Professional Billing
Hospital and professional billing frequently work together to guarantee accurate and comprehensive billing over a patient’s entire course of care. Discussed below are some common scenarios to help you understand how to bill the encounter for maximum reimbursements:
Scenario # 1 – Referral Follow-Up
After receiving a referral from a physician at a hospital, when the patient visits a specialist (professional billing), he/she is charged for the diagnosis and treatment. The hospital billing team will also need this information to comprehend the entire course of patient care and bill for related procedures and tests performed earlier.
Scenario # 2 – Post-Surgical Care
Following a hospital surgery (hospital billing), the patient may require physical therapy services (professional billing), as part of their recovery plan. Thus, the medical hospital and professional billing teams must communicate to guarantee accurate coding and prevent multiple billing for the same condition.
Scenario # 3 – ER Visit with Follow-Up
A patient receives treatment after going to the ER (hospital billing). If the patient needs a follow-up visit with a physician within their network (professional billing), both billers should work together. It will guarantee accurate billing for all services associated with the initial ER visit. Besides, it may include exchanging diagnosis codes or ensuring the invoicing reflects the continuity of care.
Scenario # 4 – Hospital Admission After Physician’s Visit
A healthcare provider (professional billing) diagnoses a medical condition that requires hospitalization. The hospital billing department then takes control. However, they might need information from the first initial physician encounter to ensure precise coding and document the entire course of the disease.
For efficient revenue cycle management in the healthcare system, professional and hospital billing must work together effectively. It enables error-free patient billing, reduces claim denial rates, and expedites the reimbursement procedure.
Types of Claims for Professional and Hospital Billing
Different types of medical billing claim forms are used for professional and hospital billing:
- You can use the CMS-1500 form for professional billing, and 837-P is its electronic counterpart, where ‘P’ represents professional configuration.
- For hospital billing, you need to use the CMS-1450 (UB-04) form, and 837-I is its electronic counterpart, where ‘I’ represents the institutional representation.
Challenges of Hospital Billing
Some of the major challenges associated with institutional billing are discussed below:
A Maze of Complexity
Hospital billing is a complex procedure that takes a lot of resources and knowledge to complete. The intricacy of hospital-based billing is one of its main problems.
Multiple Services, Diverse Codes, Tight Deadlines
A wide range of services, including ER visits, inpatient care, surgeries, diagnostic testing, and more, are billed in a hospital setting. Ensuring all claims are submitted appropriately and on time can be challenging because different services may have different billing criteria, codes, and laws, making the hospital billing process more complicated.
On average insurance payers deny 17.3% in silver plans, 15.9% of in-network claims in bronze plans, 11.4% in platinum plans, 17.1% in gold plans, and 19.7% in catastrophic plans.
KFF
Need for a Specialized Billing Squad
Besides, hospitals and other healthcare facilities need specialized employees, including coders, billers, and revenue cycle management (RCM) experts, to manage the billing process.
Studies revealed a 30% shortage of medical coders in the US.
AMA
Technology and Compliance Cost
Hospitals must also invest in costly billing tools and technology to guarantee correct and effective billing. Hospitals also have to abide by stringent billing and data protection standards, which can further raise the expense and complexity of the billing process.
The healthcare industry can save 48% or $20 billion of existing annual spending by fully converting to electronic transactions.
CAQH
Challenges of Professional Billing
Professional billing is typically less complicated and less expensive than hospital billing. However, it also has its fair share of challenges:
Lack of Specialized Knowledge
Professional billing requires specialized knowledge, which is one of the main obstacles. Billers must understand different billing codes, insurance rules, and other technical requirements. Without this knowledge, they may struggle to file accurate claims on time, which could cause payment delays or rejections.
66% of providers take more than 30 days to collect after a patient encounter.
Insta Med
The Ripple Effect of Errors
Professional billing presents additional difficulties due to the possibility of mistakes or oversights. When small billing departments or individual healthcare practitioners handle professional billing, the likelihood of errors increases. As a result, payment delays, rejections, or even legal and regulatory problems may occur.
In the US, physicians are thought to leave $125 billion on the table annually. This loss is mainly due to poor medical billing practices.
Pennsylvania Office of Rural Health
MediBill MD – The Ultimate Solution to Medical Billing Setbacks
Whether you are an individual physician, a multi-specialty practice, or a full-fledged hospital struggling with the complex medical billing and coding process, MediBill MD, with its tailored Medical billing and RCM services, can help you out. What makes us best at what we do?
- A team of certified professional coders (CPCs) and billing specialists well-versed in different specialties.
- A seamless billing workflow for timely and accurate claim submission.
- Proactive A/R and denial management process for a steady cash flow.
Both, hospital billing and professional billing are a part of medical billing but are used in distinct cases and settings. We hope this guide has been enlightening for you and helped you figure out your facility or practice’s unique billing requirements.
