Professional Billing VS Hospital Billing ~ ARLearningOnline

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:

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:

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 services are commonly billed using the CMS-1500 claim form for paper claims.
The electronic equivalent is generally the 837P (837 Professional) transaction.

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 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 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 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 (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 (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

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 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.

Professional Billing VS Hospital Billing