For small medical practice owners, understanding the difference between physician medical billing and hospital billing is crucial for managing their financial operations.

Medical billing is a complex process, and failure to understand the differences between physician medical billing and hospital billing could lead to financial losses and negatively impact patient care.

In this article, we’ll go over the differences between physician medical billing and hospital billing, and highlight why it is essential for small medical practice owners to have a clear understanding of these differences.

Understanding Physician Medical Billing

In a nutshell, physical medical billing refers to the submission of claims to various insurance companies and government programs. This is so your practice is appropriately reimbursed for whatever services were rendered by a physician or physician group.

To do this correctly, medical practices must use various billing codes like CPT, ICD, and HCPCS. This is so you can identify and distinguish medical procedures, diagnoses, and supplies that are used to bill insurance companies.

Accuracy is key in this process as payment delays and denials can begin to stack up when you’re submitting claims with errors in. This plays a big part in general customer satisfaction/retention as well, as you certainly don’t want to be charging patients for services that should be handled by their insurance coverage.

Needless to say you should also ensure you’re up to date with all the latest billing practices and regulations so you can avoid any legal or regulatory violations.

Aside from accuracy, it’s always important that you’re submitting claims in a timely manner to avoid lost revenue and missed opportunities.

Understanding Hospital Billing

Similarly, the hospital billing process involves patients and insurance companies being charged for any services provided by the hospital as a whole. Think hospital stays, radiography tests, and medical procedures.

While this sounds practically the same, the key difference is physician billing is for the services rendered by individual physicians. We’ll go over this in more detail later.

As with the medical billing process for physician services, it’s crucial to regularly review your hospital bills to ensure you’re not submitting claims with discrepancies or errors.

Furthermore, if you have a good understanding of what medical billers do here, you can negotiate better with insurance companies to advocate for fair reimbursement rates.

Key Differences Between Physician Medical Billing and Hospital Billing

One of the main differences between physician medical billing and hospital billing is the billing codes used.

As mentioned earlier, for physician medical billing services, CPT codes are primarily used to describe a medical service provided by healthcare professionals. In contrast, hospital billing uses Diagnosis-Related Group (DRG) codes to categorize medical services.

Another key difference between physician medical billing and hospital billing is the reimbursement rates. As a general rule of thumb, a medical biller for physicians typically has higher reimbursement rates than hospital billing reimbursement rates.

This is because physician services are often more specialized and require more expertise and training.

These differences have a significant impact on your healthcare organization, both financially and operationally. Small medical practices often rely heavily on reimbursements from insurance companies to stay afloat, and the lower reimbursement rates for hospital billing can make it challenging to cover expenses.

Additionally, the use of different billing codes can make it difficult to keep track of revenue and expenses, especially for smaller practices that may not have the resources to hire dedicated billing staff.

Best Practices for Managing Physician Medical Billing and Hospital Billing

One of the more valuable things you can do as a medical practice owner is to stay up-to-date with changes in medical billing codes and regulations. As you know, medical billing codes and regulations are constantly changing, and it can be challenging to keep track of all the updates.

As healthcare providers, it’s understandable that you may not have the expertise or time to put aside regarding the administrative bureaucracy involved in medical coding. That’s why outsourcing to a third party organization such as PMN can be a smart move.

Outsourcing With PMN

When you outsource with PMN, you’re not just getting a deep understanding of the medical billing industry, but also the latest billing codes, regulations, and insurance policies. They’re always on the lookout for industry changes to keep your billing accurate and compliant, which ultimately reduces the chance of a denied claim/lost revenue.

Moreover, you can also reduce your practice’s overhead when working with PMN. They handle all aspects of billing, including claim submission, tracking, processing patient payments, and denial management, which means you can focus on providing quality patient care.

Perhaps most importantly though, PMN provides medical billing and coding audits and reports to ensure your practice is adhering to the necessary rules and regulations.

If you’d like to learn more about what PMN can offer your business, don’t hesitate to get in touch by calling (949) 215-5055 today! Alternatively, you can visit their office in Laguna Hills, Orange County, California, if you prefer chatting in person.

FAQ

Can My Medical Practice Bill for Both Physician and Hospital Services?

If your practice provides both types of services, yes, of course your practice can bill for both types! Generally speaking, billing for both services can actually increase the revenue of your practice, as it allows you to bill for a wider range of services provided to patients.

However, make sure you’re aware of/using the appropriate codes for whatever medical services rendered to ensure accurate billing.

What are Some Common Physician Services You Can Bill for?

Some of the more frequent services typically include office visits, consultations, and procedures performed in the office. As mentioned earlier in the article, physician billing is for individual healthcare workers, so anything that falls under this umbrella term can be billed for.