Decoding the Differences Between Hospital Billing vs. Professional Billing

February 21, 2023

Hospital billing and professional billing both refer to the process of submitting and receiving payment for medical services provided to patients. While both types of billing involve similar functions, there are some key differences. Let’s dive into them.

What is Hospital Billing?

Hospital billing, or institutional billing, refers to submitting and receiving payment for medical services provided by a hospital or other medical facility. This might include inpatient and outpatient care, diagnostic tests, and procedures. In hospital/institutional billing, the hospital is typically responsible for submitting claims to the patient’s insurance and collecting payment for services rendered.

What is Professional Billing?

Professional billing, also called physician billing, refers to submitting and receiving payment for medical services provided by a physician or medical professional. This might include office visits, procedures, and diagnostic tests. In physician billing, the medical provider is typically responsible for submitting claims to the patient’s insurance and collecting payment for services rendered.

What are the differences between hospital and professional billing?

One key difference between hospital billing and physician billing is the complexity of the billing process. Hospital billing tends to be more complex due to the wide range of services and the number of medical professionals caring for a single patient. In contrast, physician billing is typically less complex, as it usually only affects the services of a single medical professional.

Another difference is the type of insurance claims that are typically submitted. In professional billing, claims are usually presented on a fee-for-service basis, where the medical provider is paid a set amount for each service provided. In hospital billing, claims may be submitted on a fee-for-service basis, but they may also be submitted on a case rate or per diem basis, where the hospital is paid a set amount for each day of care.

There are also differences in the payment type typically received for physicians and hospital billing. In professional billing, payment is generally received directly from the patient’s insurance company or the patient if insurance does not cover the services. In hospital billing, payment may be received from the patient’s insurance company, from the patient, or a third-party payer, such as Medicare or Medicaid.

Another essential difference between physician and hospital billing is the risk of denied claims. Denied claims can be a significant source of lost revenue for physicians and hospitals. Still, the risk is typically higher for hospitals due to the complexity of the billing process and the variety of services provided.

Using Both Professional and Hospital Billing

Hospitals use both professional/physician billing and hospital/institutional billing to ensure that they are reimbursed for all the services they provide.

SSI offers a comprehensive range of claims and billing solutions, including hospital and professional billing. To learn more about how our suite of solutions can benefit your organization, we invite you to request a demo.

Or, click here to explore a case study on how Northern Regional Hospital enhanced its billing by implementing SSI’s professional billing in conjunction with its existing SSI hospital billing platform.