What Is the Difference in Hospital Billing and Professional Billing?

It is imperative to research and be knowledgeable about all medical billing types and techniques if you want to further your career in the healthcare industry’s billing and finance sector for hospital outsourcing billing companies. You must have a firm understanding of these two categories as well as the distinction between professional billing and hospital billing before entering the realm of healthcare billing.

Hospital billing vs professional billing

Hospital billing vs professional billing

This is due to the fact that billing and submitting claims fall under various categories in a medical billing company, therefore you must have the necessary information to determine which claims should be submitted under professional billing or hospital billing.

In other words, “institution billing” is also refers to as “hospital billing,” and “professional billing” is also refers as “physician billing.” Additionally, these billing services that medical billing practices cover.

The healthcare professionals developed these categories who work in the billing industry in order to increase understanding of the billing processes and decrease denials brought on by the codes’ complexity. Let’s learn more about the distinctions between these two charging methods.

 Physician billing and its procedures

The process of submitting claims for the procedures and medical services that the healthcare providers offer and physicians to recieve payments by the healthcare insurance refers to physician billing, also refers as professional billing. To submit claims for payment, doctors use the CMS-1500 or 837-P physician billing forms. While the 836 is the electronic form to submit claims for CMS-15600, there is no difference between the two forms.

Medicare, Medicaid, and certain other healthcare insurance providers only accept electronic submission of claims as a condition of the charging approach. As previously stated, the form CMS-1500’s 837-P electronic version, where “P” stands for “professional,” Compared to someone who submits claims for institutional or hospital billing, a professional medical billing specialist has greater duties. This is due to the fact that greeting patients, registering them, keeping track of their check-ins, collecting payments, and maintaining records are some other managerial and administrative activities that are happening in physician billing.

Outpatient and inpatient services refer to the services that may go for reimbursement through physician billing for both inpatient and outpatient care. Each medical insurance plan is unique. Patient verification is required because of this. Additionally, in- and outpatient policies covers many activities that the majority of insurance providers develop.

It’s also crucial to keep in mind that physician billing includes medical billing based on intricate medical coding. This implies that in order to be a professional billing specialist, you must also be familiar with the coding practices used in medical billing procedures. In contrast, hospitals employ medical billing specialists and a separate coding team to handle the daily billing tasks.

Hospital billing and its procedures

Hospital billing, also known as institutional billing, is based on the claims for both in-patient and out-patient services that hospitals and other healthcare facilities provide. Additionally, the labs, radiology, medical facilities, medical supplies, and equipment, among other things pay the hospital facility’s expenses for the services rendered to in-patients and out-patients.

Hospitals use the claim form UB-04 or 837-I to file the claims. There is no distinction between the 837-I electronic form and the UB-04 paper version in this instance. The configurations utilized for institutions are referred to as I in the 837-I.

When both professional and hospital billing follow the same billing process. The coding process is the sole thing separating the two. There is no coding involved in the hospital or institutional billing; it just uses the medical billing method. Physician billing, however, needs for intricate medical coding processes. If include the assertions regarding qualified nurses, medical devices, radiology, etc. Compared to physician billing, medical billing for institutions is more challenging.

How to elevate revenues with hospital and physician billing?

How to elevate revenues with hospital and physician billing?

Both medical and physician billing have numerous differences in revenue generation and reimbursement processes. However, both billing domains’ claim submission procedures have a value-driven function in preventing false claims and denials.

Making sure that no claim or procedure bills should be the physician’s biller’s first focus. Additionally, caution need when presenting assertions that there are no coding problems. Other types of errors, such as technical mistakes or outdated billing regulations, might also occur. Physicians frequently contract out their billing needs in order to eliminate any possibility of error. To prevent rejections and mistakes, hospitals also think about outsourcing their claim filing procedure.

Contracting out a billing service Healthcare professionals are specialists in both physician and institutional billing procedures. They are also professionals in coding and stay up with any billing revisions from government agencies. When doctors and hospitals seek to lower the cost of recruiting professionals and experts, they come highly recommended. Furthermore, if the claims are rejected, there would be a greater financial loss.

Because there are more claims for hospital billing, there is a greater requirement for precise billing in order to complete collections and bill appropriately. Only experts are employed for the institutional billing service because it is significantly more complex and tough than physician billing.

Types of medical billing systems

Understanding the various billing systems is crucial after learning about the categories. Three different types of medical billing systems are available in the healthcare sector;

·        Closed

Transfers cannot be made in a closed medical billing system. Which means there is only one practice that represents it. An illustration of a closed medical billing system is the electronic medical record (EMR).

·        Open

It enables transfers between medical centers, practitioners, and other entities. Open medical billing systems include, for example, HER – Electronic Health Records.

·        Isolated

Although it was once used in the healthcare sector, the third type of medical billing system is no longer in use. Personal health records (PHR) are one type of standalone medical billing system.

Hopefully, after reading the above-detailed discussion, you have a clear understanding of the distinction between hospital billing and professional billing. Keep watching for updates on charges and services.


In terms of revenue distributions or increasing revenue reimbursements, physician and hospital billing continue to be separate. However, their procedures are crucial in preventing denials and fraudulent behavior. Making sure that no claims or treatments go unpaid or are overlooked becomes the biller’s first priority. However, the biller must watch out for issues with medical billing and coding while submitting the claims. There are many other reasons why problems can happen, including human and technological mistakes.

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