Understanding the Two Different Types of Medical Billing

types of medical billing

While going to a hospital or any medical facility can feel the same across the board, many differences exist. For example, hospitals have different general, specialized, and inpatient services. In addition, the way a facility handles medical records and billing can also differ. 

For people interested in becoming a medical biller, it’s crucial to recognize that different types of medical billing exist. Healthcare providers may follow two types of medical billing: institutional and professional. How these two medical billing systems process claims can vary vastly. 

This guide explores these two medical billing systems in more depth, including HIPAA in medical billing

What’s Professional Billing? 

The two types of medical billing are professional and institutional. First, let’s look at professional billing.

Individual medical practices use professional billing, and when someone specializes in professional billing, they often need to understand coding and billing systems. 

What Forms Does Professional Billing Use?

In professional billing, you’ll see charges appearing on a CMS-1500 form. Suppliers and physicians use this paper form regarding claim billing. Workers process many of these claims via paper, but electronic systems are quickly becoming the standard. 

When insurance companies, including Medicaid and Medicare, use electronic claims as their primary method, they use a different form than CMS-1500. The electronic version of this form is 837-P, with the P referring to the professional format. 

What Are the Job Duties in Professional Billing? 

Professional medical billers typically have different duties than their institutional billing counterparts. For example, professional billers generally need a coding certification, and some organizations can have stricter requirements regarding coding. 

For billing, workers can receive on-the-job training. Professional billers may also need to collect payments from patients and insurers. 

What’s Institutional Billing? 

An institutional biller handles billing claims created for the labor generated by clinics, nursing facilities, hospitals, and more. This billed work performed may include the following: 

  • Radiology services 
  • Inpatient and outpatient services 
  • Supplies and equipment 
  • Laboratory services 

What Forms Does Institutional Billing Use? 

For paper forms, institutional billing uses UB-04, which is the standard red ink on white paper form. For electronic forms, you have 837-I, with the “I” referring to the institutional format. 

What Duties Do Institutional Billers Have? 

Often, institutional billers assume different tasks than professional billers. Billers typically only focus on billing, but occasionally collections as well. Since hospital coding features more complications than physician coding, a separate division handles coding. 

Skills and Duties Across the Board

Whether an institutional or professional biller, a worker should possess the following qualities: 

  • The ability to efficiently submit medical claims 
  • Knowledge of how to avoid HIPPA security and privacy transgressions 
  • The ability to bill claims correctly to avoid any delays 
  • Familiarity with the billing software a facility uses
  • Ability to effectively communicate

Let PracticeForces Help Today 

Running a medical facility of any size or scope presents many challenges. Many factors are at play, from working with a patient’s insurance company to scheduling appointments, the two types of medical billing, and more. 

Clearwater, FL, medical care organizations can learn more about institutional vs. professional billing by calling PracticeForces at (727) 499-0351!

Parul Garg, CEO and co-founder of PracticeForces, has significantly contributed to the growth of over 1,000 U.S. medical practices through her expertise in medical billing and coding since the company’s inception in 2003. With a background in Computer Science and an MBA in Human Resources, her leadership and AAPC-certified coding skills have been pivotal in managing the company’s operations effectively.

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