The two broad classifications of medical billing are physician billing vs hospital billing. Both billing systems possess similar roles and functions, especially in relation to the compensations given to healthcare providers for the services provided. Nevertheless, they are very distinct in some ways, such as their structure, what is entailed in the program, and the way reimbursements are made. A healthcare provider, someone in the insurance field, or even a healthcare consumer needs to make a distinction between the hospital and its billing practices and those of a physician.
Understanding Physician Billing
Physician billing is the process employed by physicians, independent practitioners, and other providers to seek payment for the services given to patients by insurance providers. Physician-based billing mainly covers outpatient services, consultations, and any procedures offered and carried out by one physician in his office or clinic.
How Physician Billing Works
Medical billing begins when the physician avails of service to the client. After the service delivery, the provider assigns a CPT code, which is universally acceptable to insurers as it is a taxonomy that refers to specific medicine services or procedures. Also, the role of diagnosis refers to ICD (International Classification of Diseases) codes that are assigned to patients. They are next enclosed in a claim to the insurance company. Upon assessing the claim, the insurance evaluates the coverage and pays the physician in proportion to their decision.
Key Elements of Physician Billing
The main activities involved in physician billing are as follows:
- CPT Codes: For example, these reference the type or kind of service that was rendered, which could be an office visit or a minor surgical procedure.
- The ICD Codes refer to the patient’s ailment or state, which are critical for billing purposes.
- HCPCS codes: These are codes related to the supplies and some procedures that are not included in CPT codes.
- Accessories: Accessories are appended to codes to show whether the code has been modified with a change in procedure time, more services, etc.
Understanding Hospital Billing
While physician billing deals primarily with self-employed doctors and their professional services, hospital billing covers a number of services offered at the hospital. Hospital charges comprise charges for the hospital facility, ward, diagnostic procedures, drugs, and other procedures that a patient undergoes during his / her stay in the hospital.
How Hospital Billing Works
In hospital billing, the patient receives a bill for various services in addition to those provided by the physician. These may include costs of accommodation, investigations, imaging, laboratory, and other services provided by the hospital. It also includes charges from the professional fees of doctors affiliated with the hospital, but they are separately accountable for the charges apart from the facility costs.
Healthcare billing has a different process from the hospital billing system, with processes like the Diagnosis-Related Groups (DRG) that group the services delivered by the hospital according to the diagnosis. ICD codes also find application in hospital billing since these codes are useful in providing details of a patient’s condition and management.
Key Elements of Hospital Billing
Some of the sub-activities in hospital billing are as follows:
- These group patients for payment by dividing them into categories according to their patient’s diagnoses and the treatments administered.
- These are codes that define where in the facility the service was rendered, for instance, in the emergency or the laboratory.
- ICD Codes: Same as in physician billing, these codes define the illness of the patient as well as the treatment that s/he requires in the hospital.
- CPT: In circumstances where procedures are rendered by hospital personnel, the CPT code is used to detail the service offered.
Physician Services vs Hospital Services
After sensing the differences between physician and hospital billing, the physician service is distinct from the hospital service.
What Are Physician Services?
Outpatient care means the services that the physician provides to the patients without the need to admit them to the hospital. Included among them are; office access, consultation, minor surgery, and special care services. For instance, the attendance of a cardiologist for an assessment and diagnosis is categorized as the physician service. These services are charged apart from the hospital charges even though the doctor operates in a health facility.
What Are Hospital Services?
On the other hand, hospital services refer to a wider list of services within a hospital setting. These services are provided through accommodation, emergency, admitting, diagnosing, and prescriptions. The problem of cost is solved with hospital costs being bundled, where a patient is charged for everything he needs in the hospital.
The Distinction Between Physician and Hospital Services
The key difference between the two is the provider and place of service of the said medical service. Whereas physician services are related to the physician’s skills as a specialist in his or her medical specialty, hospital services come in the form of room charges, equipment, and staff in the hospital.
Physician Billing vs Hospital Billing: The Key Differences
The services and processes observed in physician billing differ from those related to hospital billing. However, physicians and hospitals use different billing models.
Billing Models for Physicians
Physician billing can be described as a type of health personnel reimbursement where the healthcare provider is remunerated depending on the tasks accomplished. This may refer to an assessment that you arrange with your doctor, a test that may be recommended by your doctor, or a treatment that may be recommended by your doctor. Physicians’ compensation primarily involves fee-for-service or bundles of service depending on insurance and type of care.
Hospital Billing Vs Physician Billing Models
Hospital billing has what can be referred to as a more detailed billing structure. Hospitals may charge per service offered (for instance, laboratory, diagnostic, or operation), but the most common is the DRG system, where payment is made per diagnosis and treatment is offered to the patient in the hospital. This system means that the patients’ hospitals are fully paid for all the services offered to the patient during his/her stay in the hospital.
Payment Structures in Physician Billing and Hospital Billing
In terms of revenue collection, it is also unique depending on whether the physician or the hospital is billing for the encounter. If physician billing can refer to a simple charge for a specific service that has been performed, then hospital billing may require a whole set of charges for the services and all the facilities that have been utilized in the whole process leading to the hospital visit. It is true that due to a pyramid of services offered within a hospital, the rates of billing are far more complicated and, thereby, the overall expenses.
Medical Claims vs Hospital Claims: Understanding the Differences
The difference between the medical claims and hospital claims will be helpful for managing the process of filing billing. These terms may seem to have the same meaning, but they are used as different concepts in insurance and healthcare reimbursement.
What Are Medical Claims?
Medical claims can be defined as the demands made by the medical providers for payment to insurance companies for the services provided by them. These may include physician visits, but they also extend to diagnostic tests, carrier outpatient procedures, or any outpatient services. They usually consist of the service detail, the diagnosis, and the code classification involved, which includes the CPT, ICD, or HCPCS.
What Are Hospital Claims?
Hospital claims are rather close, but they encompass more services that a hospital may provide. These reimbursements can include room fees and hospital interference and procedures, as well as medication and equipment. Several services are offered in a hospital to warrant that hospital claims require more comprehensive coding.
How Claims Differ Between Physicians and Hospitals
The only major distinction between medical claims and hospital claims is that claims are made for the medical services provided. Medical claims are usually made based on individual physicians and services, while hospital claims relate all the services required to a particular patient during his/her hospital stay.
Professional Billing vs Institutional Billing
In hospital billing vs professional billing, one needs to comprehend the concept of professional vs institutional billing.
What is Professional Billing?
Professional billing involves submitting a claim for reimbursement for services rendered by independent practitioners, including physicians, specialists, and nurse practitioners. Some services are charged differently from hospital costs and are coded using CPT codes.
What is Institutional Billing?
Institutional billing is whereby hospitals and other health facilities charge for the health services that are rendered in the institution. This may include room charges or the amount spent on performing various tests in the laboratory. Institutional billing normally involves the use of DRGs and other billing codes applicable to the place of offering the service.
Differences between Professional and Institutional Billing Companies
This results in a clear distinction between professional and institutional billing since the former deals with different services being billed. Professional billing is charged per specific service provided by a certain practitioner, while institutional billing is charged on the services offered at the hospital.
FAQ - People Also Asks
What is the difference between physician and hospital coding?
CPT and ICD codes are used to identify physician services, while hospitals use DRG and additional codes for facility charges.
What are the two types of medical billing?
The two categories include physician billing, which is billing for the services of individual physicians, and hospital billing, which is billing for a facility and/or a hospital.
What is physician-based billing?
Physician-based billing has to do with passing of claims to services offered by one health care provider such as outpatient attendance or surgical procedures.
Who is responsible for physician billing?
Physician billing is done independently by the physician or the billing department of the concerned physician.
Is medical double billing illegal?
Insurance credentialing can take at least 90 to 120-days depending on how approachable the insurance parties concerned and how intricate the assessment process is.
Who is the person ultimately responsible for paying the patient's bill?
It is the patient’s responsibility to pay for the bill, although in most cases, insurance will help out in paying part of the amount.