Professional Billing vs Institutional Billing
Both institutions and professionals can file claims on behalf of patients. That being said, what do professional vs. institutional claims really mean?
And How come it’s important to know the difference between professional and institutional claims?
We will talk about both of these ways of doing medical billing services in this guide: institutional claims and professional claims. These are also important for healthcare workers, and we will go over why.
What is Professional Billing?
For medical services or treatments given by doctors or other healthcare workers to patients with health insurance, professional billing charges are made. Professional billing is also called medical billing for the same reason. A medical office is responsible for a variety of administrative tasks for a medical practice, including but not limited to visiting patients, organizing consultations, verifying and registering patients, collecting payments, and providing a full range of other services, including medical invoicing.
Professional billing is an important part of running a medical practice because it controls many routine tasks, like making appointments, meeting patients, verifying and registering them, and processing payments. Very specific in-patient and out-patient treatments will be billed to the patient’s insurance plans, so proof is needed.
Example
You visit your family doctor because you have a sore throat. The doctor examines you, diagnoses your condition, and prescribes some medicine. After your visit, the doctor’s office codes the service (like the exam) and sends a bill, called a claim, to your insurance company. The insurance company reviews the claim and pays the doctor according to your policy. If your insurance doesn’t cover the full amount, you might get a bill for the difference.
What is Institutional Billing?
Institutional billing is the process of getting paid for services provided by hospitals and other healthcare organizations to both in-patients and out-patients. In the same way, hospital billing is sometimes called institutional billing.
Furthermore, hospital billing takes into account the work that trained nurses do. For medical services like lab tests, medical supplies, tools, images, and more, it also sends out reports. Sometimes, institutional billers are given tasks that are different from those of professional billers. It’s up to establishment billers like Medmax Technologies to decide if they only bill or also collect. Institutional billers’ most important jobs are to gather, charge, and bill for services.
Professional billing covers only the services provided by a physician or multiple physicians, while institutional billing covers all interventions and administrative charges during a patient’s stay in a hospital or outpatient emergency department.
Example
You need surgery and have to stay in the hospital for a few days. The hospital provides your room, nursing care, surgery, and medications. After you leave, the hospital codes all the services you received and sends a claim to your insurance company. The insurance company checks the claim and pays the hospital for the covered services. If there are any costs not covered by your insurance, the hospital might bill you for those.
How Professional Billing and Institutional Billing Differentiate?
Professional Billing
Service Provided: A healthcare worker, like a doctor, sees a patient and does something for them, like a check-up, treatment, or surgery.
Code the Service: Next, a method like CPT (Current Procedural Terminology) is used to turn the service into specific medical numbers. The type of service is shown by these numbers.
Send in the Claim: The service number is sent to the patient’s insurance company as a claim. For the insurance company, this claim is like a bill that spells out what work was done and how much it costs.
Insurance Review: The claim is looked over by the insurance company. The service is checked to see if it is paid for by the patient’s insurance.
Payment: If the service is covered, the insurance company will pay the provider as agreed. The patient may have to pay the rest of the bill if it’s not fully paid.
Institutional Billing
Service Provided: The center takes care of patients, which could mean hospital stays, surgeries, or treatments.
Code the Service: The services are coded in the same way that they are in professional billing, but this time they are coded using a method called UB-04 which is made for colleges.
Send the Claim: The school gives the insurance company a coded bill that lists the services and fees.
Insurance Review: The claim is looked over by the insurance company to see if the services are covered.
Payment: The center gets paid by the insurance company if the claim is accepted. The patient could be charged for any fees that are still owed.
Types of Medical Billing Claims for Institutional and Professional Billing
There are different kinds of claims for health care. Let’s go through two different kinds of medical billing claims: one is for professional billing, and the other is for school billing.
- CMS-1500 For Professional Billing
Business payment is done with the CMS-1500 form. The CMS 1500 form is replaced by the 837-P, which is used for professional bills. The professional setting is shown by the letter “P.”
- UB-04 For Institutional Billing
For paying institutions, the UB-04 form is used. For paperless claims in university bills, the 837-I is used. The institutional arrangement is shown by the word “I.”
Outsource Your Billing Services To Medmax Technologies
When it comes to revenue sharing or rising revenue payments, physician and hospital bills are still very different. For whatever reason, their methods, including professional billing, are very important for stopping rejections and scams. As the biller, it is your main job to make sure that no claims or treatments are missed or not paid. When the biller files the claims, whether it’s for professional billing or institutional billing, they need to watch out for medical bills and coding issues. Problems can happen for many reasons, such as mistakes made by staff or by technology.
Most hospitals and other healthcare facilities opt to outsource professional billing and institutional billing services to Medmax Technologies to minimize billing errors. As an institutional hospital biller, one of their main jobs is to collect all the bills and make sure the billing process runs smoothly. Hospital coding, compared to professional billing, is supposed to be a lot more complicated than private medical coding. Because of this, only coding pros handle institutional issues. It’s important to have billers and coders who fully understand the whole process.
