Hospital Billing vs. Professional Billing

Hospital and professional billing are both part of medical billing—but they’re not the same. They’re used in different settings and cover different services. This guide breaks down the key differences and shows how they can work together in various scenarios.

What’s more? Both billing types come with their own challenges. We’ll dive into those, too. And to help you tackle them and get faster reimbursements, we’ll introduce a top-tier billing solution.

Let’s dive in.

Professional Billing

Professional billing handles claims when a healthcare provider—or another qualified professional—delivers care to patients with insurance. Often called physician billing, it’s specific to services by doctors and clinicians.

It also covers core medical office activities:

• Verifying patient information
  
• Registration
  
• Appointment scheduling
  
• Payment processing
  

Hospital Billing

Hospital billing deals with claims for services provided by hospitals or healthcare organizations. Also known as institutional billing, it covers inpatient and outpatient care.

This includes:

• Professional nursing services
  
• Medical supplies
  
• Imaging and lab work
  
• Equipment usage
  

Hospital billers sometimes perform tasks that differ from those of professional billers.

Key Differences: Hospital vs Professional Billing

Professional billing is limited to services provided by physicians and other healthcare professionals.

Hospital billing, on the other hand, encompasses all costs associated with patient care in a hospital or an outpatient emergency room. That means interventions, administrative costs, and more.

Collaboration: Hospital Billing & Professional Billing Hospital and professional billing often work together. Why? To ensure accurate, complete billing across a patient’s entire care journey. Here are some common scenarios to illustrate how both billing types coordinate for maximum reimbursements:

Scenario #1 – Referral Follow-Up: A patient is referred by a hospital physician. They visit a specialist. This is professional billing for diagnosis and treatment. The hospital billing team needs this info too. They use it to understand the full course of care. They bill for earlier procedures and tests. It’s a lot.

Scenario #2 – Post-Surgical Care: A patient undergoes surgery at a hospital (hospital billing). Later, they need physical therapy (professional billing) for recovery. Both billing teams must communicate. Accurate coding matters. Duplicate billing is what must be avoided. Don’t double bill. It’s bad.

Scenario #3 – ER Visit with Follow-Up: A patient is treated in the ER. That is hospital billing. It’s fast. It’s intense. If a follow-up visit with a network physician is needed (professional billing), the teams coordinate again. This ensures all services tied to the ER visit are billed correctly. Diagnosis codes may be exchanged. Continuity of care is what is reflected in the invoicing.

Scenario #4 – Hospital Admission After Physician Visit: A physician (professional billing) diagnoses a condition that requires hospitalization. Hospital billing takes over. But they may still need info from the initial physician visit. Why? To code accurately and document the patient’s full disease course.

Effective collaboration between the hospital and professional billing is essential. It reduces the errors. It lowers claim denials. It speeds up reimbursements. Do not let the money sit.

Types of Claims for Professional and Hospital Billing

Different forms are used for each billing type:

• Professional billing: CMS-1500 form, or its electronic counterpart 837-P (‘P’ = professional).
  
• Hospital billing: CMS-1450 (UB-04), or its electronic version 837-I (‘I’ = institutional).

Hospital Billing Headaches

Hospital billing has many a headache. Complex. Time-consuming. Resource-heavy. It’s a maze. One misstep and claims get delayed. Payments stall. It happens fast.

A Maze of Complexity

It isn’t simple. It requires expertise. Knowledge. Attention to detail. Complexity is what everyone struggles with. It’s the biggest challenge.

Professional Billing Hurdles

Professional billing is simpler and cheaper. Usually. But it still has hurdles you’ll have to deal with. It’s not always easy.

Services, Codes, and Deadlines

Hospitals juggle way too much stuff. ER visits. Inpatient care. Surgeries. Tests. Each service has its own codes, rules, and weird timelines. Submitting claims correctly and on time is what you’ll find hard. Mistakes are easy. Delays happen fast.

The Specialized Team Requirement

Hospitals need a team. A good one. Coders. Billers. RCM specialists. These are the experts who know the system inside out. Without them, billing errors will rise. Your revenue is what will suffer.

Tech and Rules Costs

Good billing needs tech. Expensive software. Advanced tools. Staying compliant with rules is a whole other layer of cost and complexity. It’s a mess. Switching to electronic deals could save the industry big. Up to 48%, or $20 billion. That’s a lot of money to leave.

Professional Billing Hurdles

Professional billing is simpler. It’s cheaper too. Usually. But it still has hurdles you’ll have to deal with. It’s not always easy.

Lack of Specialized Knowledge

Specialized knowledge is missing. Billers need brains. Different codes. Insurance rules. Technical requirements. Without this knowledge, filing accurate claims on time is what you’ll struggle with. Payments get delayed. Claims may even get rejected. Fact: 66% of providers take more than 30 days to collect after a patient encounter.

The Ripple Effect of Errors

Mistakes happen. Especially in small billing teams or solo practices. A small oversight can snowball into big problems: delayed payments, claim rejections, and regulatory headaches. In the US, physicians are estimated to leave $125 billion on the table every year. Most of that comes from the poor billing practices.

The Ultimate Solution to Medical Billing Setbacks

Struggling with billing? It’s a mess. Whether you are a solo doctor, a specialty group, or a hospital, Medyratech helps. Here is why: Certified CPCs are on the team. They have expertise in every specialty there is.

Our workflow is smooth. We get claims fast. Accuracy is what we focus on.

We manage A/R. Denials are handled. Your cash flow stays where it belongs.

Hospital billing and professional billing are both forms of medical billing. They just happen in different places. We hope this helped. Now you know your billing needs better. Go handle them.