Healthcare providers either work individually or under an institution. In both cases, they perform medical billing to receive adequate reimbursement. Filing claims independently or through an institution are different things.
If your goal is to attain a robust bottom line, then understanding the difference between professional billing and institutional billing is necessary. It helps determine the best claim filing practice and choose between professional vs. institutional claims.
In this blog, we will explore the distinction between professional claim processes and institutional claim processes. Let’s go through every aspect of professional and institutional billing!
Breaking Down Professional vs. Institutional Claims
The professional claim process is different from the institutional claim process. Decoding the difference between two would help healthcare providers and practices in determining their ideal medical billing process.
In simple terms, professional billing is for individual healthcare providers, and institutional billing is for medical facilities such as hospitals and clinics. However, there are other differences highlighting the need for skilled medical billing. The whole concept of professional vs. institutional claims is designed to simplify the administrative process.
Let’s analyze both terms separately!
Professional Claim Process
An approach to acquire extensive revenue cycle management!
When healthcare providers, physicians, or medical professionals who work independently file claims, it comes under the professional claim process. Every treatment they render to their patients is reimbursed under the terms of professional claim filing. Due to this nature, professional billing is also known as physician billing.
Another major factor is that professional claims can be reimbursed for minor procedures performed by an independent physician. The scope of services provided is also limited to consultations and evaluations.
Clearly, the professional claim process hardly deals with full-fledged difficult medical treatments and procedures.
Here are more specific points:
- Professional claims can be filed via a quicker revenue cycle. This is because the approach is simple, and services provided are limited to what an individual medical professional can offer.
- Regarding claims, individual healthcare providers' claims are filed through the CMS-1500 form (physically) and 837-P (digitally).
- As the focus is on specific services, there is a less rigid requirement for documentation. This is because focusing on every single patient separately is much easier.
- In terms of reimbursement as well, collection is on the basis of each service. It also depends on the agreement with the insurance provider.
- Healthcare providers can interact with their patients directly and inform them about their financial responsibility. They can also focus on enhancing patient satisfaction.
- Usually, physicians handle the process of medical billing themselves without any professional and interact with insurance providers directly.
- The professional claim process doesn't witness serious payment disputes, but they may exist in some cases.
What Makes the Professional Claim Process Complex?
As healthcare providers handle the administrative work themselves, the chances of medical billing and coding complexities increase.
- The claims are more likely to result in denials due to a lack of proper coding knowledge and skill.
- If the healthcare provider has to file claims for multiple specialties, then the chance of errors increases further.
- Healthcare providers may not be able to translate intricate treatments into accurate codes, leading to tricky denials.
- Achieving complete accuracy and efficiency may be the biggest target, but it is not possible without technological tools.
- Keeping up with changing compliance requirements is crucial for clean claims, but being proficient in this is still a challenge.
Institutional Claim Process
Streamlining complicated billing and coding for adequate revenue!
Unlike professional billing, the institutional claim process is all about acquiring revenue for medical services rendered by any healthcare organization, such as hospitals, clinics, or any other medical facilities.
The institutional claims process includes all types of services provided to patients. From diagnosis, treatment, and minor procedures to surgeries, inpatient and outpatient treatment. All this comes under institutional medical billing.
As the number of medical specialties and patients increases, the process of medical billing and coding also elevates. This is the reason behind heightened complexities such as inaccuracy and inefficiency.
Here are some more specific points about institutional medical billing:
- Filing institutional claims takes time; that is why healthcare organizations have comparatively longer revenue cycles. This is due to the complexity of medical billing and coding.
- Institutional claims are filed through the UB-04 form (physically) and 837-I (digitally). Now, this form may be different for different healthcare facilities and organizations.
- Institutional billing requires a well-detailed documentation step to ensure its accurate translation into codes specific to medical specialties. It is necessary as institutional services consist of various specialties and departments. The documents must include patient demographic data, their diagnosis, treatment plan, and rendered procedures.
- For effective claim processing, healthcare organizations need to communicate with insurance payers and manage claims.
- Regarding reimbursement, institutions can achieve revenue for the overall services rendered. It also involves bundled payments or diagnosis-related group (DRG) payments.
- As hospitals handle a multitude of patients every day, healthcare providers have little time to indulge in direct communication with patients. Even though patient responsibility is conveyed directly, personalization is limited.
- Managing the institutional claim process is not the task of a single person. Medical facilities usually set up an in-house team to manage medical billing. They can also outsource their medical billing process and let medical billing services handle the entire administrative process.
- As the size of the practice grows, the number of disputes may also increase. The reason behind this is complex medical specialties and multiple stakeholders.
What Makes the Institutional Claim Process Complex?
Handling an entire medical facility such as a hospital or a clinic is a huge responsibility. There are various factors that make this process complex, and they are:
- Manual errors that occur due to incoordination and inaccurate documents are common issues of institutional medical billing.
- As there is diversity in medical specialties, there is also a need to know the billing and coding requirements of them all. This becomes intricate for healthcare providers.
- Ensuring a productive bottom line depends on a deep understanding of coding systems such as ICD-10, CPT, and HCPCS. Sometimes, healthcare providers may not be able to match the required skills. To counter this, healthcare can get professional medical billing services.
There are other challenges, such as maintaining patient satisfaction, ensuring medical necessity, dealing with insurance providers, and introducing technologically advanced tools for more efficiency.
When we analyze professional vs. institutional claims, even if the basic concept is different, both go through similar medical billing challenges. Moreover, even the goals are similar, such as improving revenue cycle management and enhancing operational efficiency.
Outsourcing the medical billing process to professionals is an ideal option to reduce complexities and increase revenue collections. This way, healthcare providers also shift their stress and devote time to patient care.
Choosing expert medical billing is a task in itself. So, we have a suggestion for you: Eminence RCM!
Why Outsource Medical Billing from Eminence RCM?
Eminence RCM is an experienced medical billing company expert at handling administrative complexities. We understand your medical billing hassle and deliver our best services to reduce your burden.
Whether it is professional claim processing or institutional claim processing, our team skillfully handles the revenue cycle. We ensure your practice always stays ahead of billing trends and achieves adequate revenue.
At Eminence RCM, we incorporate advanced technological solutions and assist your medical practice in attaining accuracy and efficiency. Our team successfully reduces manual errors and enhances operational flow. We ensure complete regulatory compliance and a proper denial management process.
Choose Eminence RCM and get top-notch medical billing services!