Physician Billing V/S Hospital Billing: The Key Differences

Don’t you think that exploring the different types of medical billing processes soar in the medical domain before implementing a perfect physician billing strategy? Before you implement a robust billing process, you must know the difference between physician billing and hospital billing.

At the very beginning, you should know one thing physician billing is known as “professional billing” and on the other hand, hospital billing is called “institutional billing.” The entire billing process is categorized into these two parts. Healthcare professionals always differentiate these terms based on their intention and the services involved in billing management.

Let’s dig into the details of what makes physician billing different from hospital billing mechanisms.

What are physician billing services:

Physician billing is a process of billing claims for receiving reimbursements for services and diagnoses provided to patients by physicians. It can also be used for billing suppliers and non-institutional providers. The whole physician billing process covers both in-patient and out-patient services and procedures. The in-patient or out-patient services should be billed after completing the insurance verification process. This is because insurance companies cover only certain in-patient and out-patient services under their policies. This type of billing includes various administrative tasks- from appointment scheduling, patient check-in, insurance verification, prior authorization, documentation, and coding to collecting payments, posting payments, etc.

CMS-1500 and 837-P are the two forms used in physician billing. What makes two physician billing forms different is their version. CMS-1500 is the paper version and the electronic version is 837-P.. In a few scenarios, Medicare, Medicaid and private payors only accept electronic versions as the mandatory means of charging. In the 837-P claim form, P stands for professional configuration.

What are hospital billing services?

Hospital billing often involves the formalities of invoicing for services provided by skilled nurses. Generally, it covers billing claims for laboratory services, medical equipment and supplies, radiology, etc. UB-04 and 837-I are the two claim forms utilized in hospital billing. The UB-04 is the paper version and the 837-I is the electronic one. In the 837-I form, I represent the institutional configuration.

The major difference between hospital and institutional billing processes only deals with the billing process, not medical coding. However, in physician billing, you are responsible for handling medical coding and claims submission.

Now that you know how physician billing differs from hospital billing, it’s time to know the critical steps involved in the physician billing process.

Crucial physician billing steps:

1) Patient registration:

The critical patient information includes personal details, insurance coverage, and primary/secondary payers.

2) Insurance verification:

This step involves checking a patient’s insurance eligibility, coverage details and if there is any out-of-pocket payment required from a patient’s side.

3) Prior authorization:

There are specific physician services that require you to receive prior authorization approval from a patient’s insurance company before providing those services. Failure to obtain prior authorization can cause claim denial and out-of-pocket payments for patients, thus leading your practice to encounter revenue loss and patient dissatisfaction.

4) Medical coding:

To ensure a perfect physician billing structure, you need to convert the physician’s notes on diagnoses, treatments and procedures into standardized ICD-10, CPT and HCPCS codes.

5) Charge entry:

In this stage, you need to enter accurate charges for provided services based on the codes and fee structure. You need to provide exact charges for the rendered services.

6) Claim review:

Review claims for any errors, inconsistencies, or missing information before submission. This pre-submission audit helps reduce the likelihood of denials or rejections.

7) Claim submissions:

This is a vital step where you need to submit claims to insurance companies or patients. The claims should be submitted within the deadline. You must comply with payers’ guidelines to avoid claim denials.

8) Payment posting:

Once you receive the payment from a patient’s insurance company, you need to post it to the patient’s account. This involves adjusting payment according to a contractual agreement or patient’s responsibilities.

9) Accounts receivable management:

Monitor and identify delinquent invoices and process those for collecting payments. Effective management of accounts receivable ensures healthy cash flow for your practice.

10) Denial management:

If a claim is denied, initiate the denial management process, which involves investigating the reasons for denial, correcting errors, and resubmitting the claim for payment. Efficient denial management helps recover potential lost revenue.

11) Reporting and analytics:

Finally, you should use analytics to generate reports to know your practice’s billing performance, shortcomings and improvement areas.

Now you might have already realized the fact that physician billing services are a complex job as it eats up substantial amounts of energy, time and resources from providing perfect patient care. To ensure a perfect physician billing process, you can outsource this job to a professional third-party revenue cycle management company like Sunknowledge and enjoy an excellent revenue boost while having reduced operational costs by up to 80%.