Professional Billing VS Hospital Billing
1. What is Professional Billing?
- Professional Billing (PB) is the billing of services provided by a physician or other healthcare professional.
- It mainly represents the provider's professional service.
- Professional billing can include services such as:
- Evaluation & Management (E/M) services
- Office visits and consultations
- Professional procedures
- Physician interpretation of certain diagnostic services
- Example: Suppose a patient visits a hospital and sees a cardiologist. The cardiologist examines the patient and performs an ECG. The cardiologist's services will be billed through Professional Billing.
- A cardiologist provides an office visit, so an E&M code will be billed for Professional Billing.
2. What is Hospital Billing?
- Hospital Billing (HB) is used to bill for the services and resources provided by a hospital or facility.
- It is also commonly called Institutional Billing or Facility Billing.
- Hospital billing can include services such as:
- Room charges
- Nursing services
- Operating room
- Laboratory
- Radiology
- Medical supplies
- Drugs
- Medical equipment
- Facility services
- Example: The same patient visits the hospital for an ECG.
- There can be two separate bills:
- Professional Billing: The cardiologist's professional service.
- Hospital Billing: The hospital's facility, equipment, supplies, and other applicable resources used to provide the service.
3. Claim Form Used in Professional Billing vs Hospital Billing
- Professional Billing:
- Professional services are commonly billed using the CMS-1500 claim form for paper claims.
- The electronic equivalent is generally the 837P (837 Professional) transaction.
- Hospital Billing:
- Hospital and other institutional services are commonly billed using the UB-04 (CMS-1450) claim form for paper claims.
- The electronic equivalent is generally the 837I (837 Institutional) transaction.
4. POS vs Revenue Code
- Professional Billing:
- Professional claims use Place of Service codes to identify where the professional service was provided.
- Example: A physician provides a service in an outpatient hospital → the professional claim may report POS 22.
- Hospital Billing:
- Hospital claims use Revenue Codes to identify the type of hospital service or department associated with the charge.
- Example: A hospital claim may contain revenue codes associated with, Room and board, Emergency room, Laboratory, Radiology, Operating room, Pharmacy, Medical supplies, etc.
5. Professional Fee, DRG & APC – Reimbursement Methodologies
- Professional Fee – Professional Billing
- Professional services are generally reimbursed using a professional fee methodology.
- The physician or other healthcare professional reports the services performed using applicable: CPT codes, HCPCS codes, Modifiers, Diagnosis codes, Place of Service
- The payer then determines the professional reimbursement based on the applicable fee schedule or other payment methodology.
- DRG – Mainly for Inpatient Hospital Billing
- DRG (Diagnosis-Related Group) is mainly used for inpatient hospital reimbursement under Medicare's inpatient prospective payment system and other payment arrangements that use DRGs.
- The patient's inpatient stay is grouped into a DRG based on factors such as: Diagnosis, Procedures, Complications and comorbidities, Other patient and stay-related information
- The hospital is generally reimbursed based on the applicable DRG rather than simply adding up every individual hospital charge.
- APC – Mainly for Hospital Outpatient Billing
- APC (Ambulatory Payment Classification) is used for certain hospital outpatient services, particularly under Medicare's Outpatient Prospective Payment System (OPPS).
- Hospital outpatient services are grouped into APCs based on the services provided.
6. CPT vs ICD-10-PCS
- Professional Billing:
- In Professional Billing, CPT codes are used to report the services and procedures performed by the physician or other healthcare professional.
- For example, if a surgeon performs a procedure, the surgeon reports the professional service using the appropriate CPT code.
- Hospital Billing:
- Hospital Billing can also use CPT codes, especially when the hospital provides outpatient services.
- For example, a patient comes to the hospital for an outpatient procedure. The hospital may report an applicable CPT/HCPCS code to identify the service provided by the facility.
- However, when the patient is admitted as an inpatient, the hospital uses ICD-10-PCS to report the procedures performed during the inpatient stay.