Difference Between Professional Billing and Institutional Billing

Professional billing and institutional billing are two different types of billing systems used in the healthcare industry. They both have distinct characteristics that differentiate them from one another.

Professional billing refers to the billing of services provided by individual healthcare providers, such as physicians, dentists, chiropractors, physical therapists, and other healthcare professionals. This type of billing is based on the services provided by the individual practitioner, and the charges are typically based on the provider’s fee schedule. In professional billing, the healthcare provider is responsible for submitting claims to insurance companies and other payers, and they will receive payment directly from the payer.

Professional billing is generally simpler than institutional billing because it only involves one provider and one patient. The billing process is relatively straightforward and requires less detailed coding and billing information. Additionally, professional billing typically involves fewer interactions with insurance companies and other payers than institutional billing.

Institutional billing, on the other hand, refers to the billing of services provided by healthcare institutions, such as hospitals, clinics, nursing homes, and other healthcare facilities. This type of billing is based on the services provided by the institution as a whole, and the charges are typically based on the institution’s charges for a particular service or procedure. In institutional billing, the healthcare institution is responsible for submitting claims to insurance companies and other payers, and they will receive payment directly from the payer.

Which is more Complex?

Institutional billing is more complex than professional billing because it involves multiple providers, multiple patients, and multiple services. The billing process is more complex and requires more detailed coding and billing information. Additionally, institutional billing typically involves more interactions with insurance companies and other payers than professional billing.

Use of billing codes

In institutional billing, billing codes are used to identify the services provided to the patient, and these codes are used to determine the charges for the services. The codes are based on the Current Procedural Terminology (CPT) codes and the International Classification of Diseases (ICD) codes. These codes are used to accurately describe the services provided to the patient and to ensure that the charges are accurate.

In institutional billing, the billing process can be divided into two stages: the charge capture stage and the charge billing stage. In the charge capture stage, the healthcare institution captures all the charges for the services provided to the patient. This includes the charges for diagnostic tests, lab work, procedures, and other services. In the charge billing stage, the healthcare institution submits the charges to the insurance company or other payer for reimbursement.

Institutional billing also includes the use of cost centres, which are used to track the costs associated with providing a particular service. These costs include the costs of supplies, equipment, and personnel. The cost centres are used to determine the charges for the services provided to the patient.

Conclusion

In conclusion, professional billing and institutional billing are two distinct types of billing systems used in the healthcare industry. Professional billing is simpler and involves fewer interactions with insurance companies and other payers, while institutional billing is more complex and requires more detailed coding and billing information. Both types of billing are essential for the healthcare industry, and they play a critical role in ensuring that patients receive the care they need and that healthcare providers are reimbursed for the services they provide.