If you’re in the healthcare industry, you are probably already familiar with the process of submitting insurance claims. But did you know that there are two types of claims you need to be aware of?

In this article, we’ll discuss the difference between institutional claims vs professional claims, and why understanding this difference is crucial for the success of your practice.

What Is Institutional Billing?

When patients receive medical services from a hospital, medical office or other healthcare professionals, the practice has to submit a claim to the insurance company or government program for reimbursement. This claim is called an institutional claim.

Hospital stays, emergency department visits, operations, diagnostic testing, and other services are all examples of institutional claims. These are usually submitted via particular forms such as the UB-04.

Examples

Take, for example, hospital stays. Inpatient care, such as room and board, nursing care, prescriptions, and medical supplies, can all be included during a patient’s visit. Other outpatient services, like laboratory testing or x-rays, may also be provided by hospitals, but these are invoiced through a different billing system.

Any surgical operation is another example of an institutional claim. The operating room, anesthetic, drugs, and any other supplies required during the treatment will be claimed by the hospital or healthcare provider.

The surgeon’s fee, however, is invoiced separately as a professional claim, but we’ll get on to that shortly.

It’s important to note that institutional claims can generally be more complex than professional claims, as they involve multiple services and providers. This can make the medical billing process more complicated, but it’s vital to ensure that all services provided are still accurately documented and coded.

To summarize, when a healthcare institution or facility offers healthcare services to a patient, they will file an institutional claim for reimbursement to the insurance company or government programme. These claims are made on specified forms and may include a wide range of services.

To avoid any unnecessary errors or complications, it’s paramount that medical practice owners have a firm grasp of the distinction between institutional claims vs professional claims, as well as the appropriate codes and forms for each kind of claim.

What Is Professional Billing?

The main difference between professional hospital billing, and institutional billing lies in the focus of the billing process. Institutional billing, which is typically used by hospitals, places a greater emphasis on the overall medical billing process, while professional billing primarily focuses on medical coding.

Professional claims are essential for ensuring your practice receives the appropriate compensation for the services provided by your healthcare professionals, such as physicians, nurses, and other providers.

As mentioned, this involves various types of medical billing and coding, where standardized codes are used to accurately document the services provided by healthcare professionals. 

These codes are then used to create claims that are submitted to insurance companies or other third-party payers for payment.

Examples

Office Visits

Professional billing applies to routine office visits with your patients. When you provide medical services during an office visit, you create a record of the service provided which is then submitted through a CMS-1500 form to the patient’s insurance company or other third-party payer for payment. 

This typically includes billing for the evaluation and management (E&M) services provided during the visit.

Laboratory Services

There’s a similar process for any lab services your practice offers. For example, if you order lab tests for your patients, you need to make a record of the provided service. Afterwards, the form gets sent to the patient’s insurance company so your practice can be reimbursed.

All in all, this is a significant process as inaccurate coding can lead to denied or delayed payments, which can have serious impacts on your practice’s revenue cycle.

This is where professional and billing software experts come in handy. They are trained to accurately code and submit claims on your behalf, ensuring that your practice receives the appropriate compensation for the services provided.

Professional Medical Billing With PMN

It can be difficult to strike a balance between keeping up with the latest codes, paperwork, and laws, all while giving outstanding care to your patients. Fortunately, PMN exists!

PMN is a medical billing and coding firm that handles professional and institutional medical claims for small medical practices just like yours.

They are specialists in their area, with a staff of seasoned professionals that remain current on coding and billing standards. This means your claims will always be accurate and compliant, saving you time and lowering your chances of having claims refused or payments delayed.

Furthermore, PMN provides a customized service that is adapted to your individual requirements. They recognise that each medical practice is unique, and  collaborate with you to customize their services accordingly to provide tailored reports. This way, you can focus on providing excellent care to your patients, while PMN handles the billing and coding.

If you’re interested in learning more about what PMN has to offer, get in touch by calling (949) 215-5055, or visit their office in Laguna Hills, Orange County, California!

FAQs

Institutional Claims VS Professional Claims – Do I Need To Submit Both?

This ultimately depends on the type of services you provide. If you work at a hospital or other institutional provider, you will need to submit institutional claims. On the other hand, if you are an individual healthcare provider, such as a doctor, you’re more likely to be submitting professional claims.

What Is The Typical Timeline For Processing Institutional Claims VS Professional Claims?

Again, this can vary depending on the insurance provider and the type of service provided. Generally though, institutional claims take longer to process than professional claims due to the complexity of the services provided. That’s why partnering with a medical billing and coding company like PMN can be helpful, as they can handle the tracking and follow-up for you.