In the USA, the healthcare system, medical billing is divided into two primary claim types: Institutional and professional. Although both aim to acquire repayment from the insurer, they differ in potential format, objectives, types of facilities billed, and the entities included. Knowing these differences is critical for healthcare providers, billing specialists, administrators, and even individuals trying to navigate the risks of insurance claims. Let’s read the blog to get you the detailed information about Institutional Billing Claims Vs. Professional Billing Claims: What’s the difference?
What are Institutional Billing Claims Vs. Professional Billing Claims?
Institutional billing claims are used by services or organizations that deliver hospital-based, outpatient, and facility-level services. These involve hospitals, skilled nursing services, rehabilitation centers, home health agencies, and specific clinics. Institutional claims capture the broader scope of care provided by services and other technical components included in patient care.
On the other hand, professional billing claims are used by individual healthcare providers – physicians, nurse practitioners, therapists, surgeons, and other practitioners. These claims represent the professional facilities provided by licensed providers. They concentrate on the expertise and time of the provider.
Claim Forms Used
UB-04 (CMS-1450) – Institutional Claims
Institutional claims are submitted on the UB-04 form, also known as the CMS-1450. This form is designed to capture complex facility-level billing data. It involves details such as:
- Type of bill.
- Revenue codes.
- Service data.
- Patient status.
- Condition codes.
- Value codes.
- Diganoiss-related groups, when applicable
- Facility charges.
Because services provide multiple facilities across departments, the UB-04 form must accommodate diverse methods, including room charges and supply usage.
CMS -1500 – Professional Claims
Professional claims use the CMS -1500 form. This form captures providers’ specific information involving:
- Rendering provider details.
- CPT/HCPCS procedure codes.
- ICD-10 detection codes.
- Modifier usage.
- Individual Facilities dates.
- Units for Facilities.
The CMS-1500 is more concentrated and concise because it represents the work of a provider rather than the operations of a whole service.
Coding Systems Used
Institutional Billing
Institutional claims rely on:
- ICD-10-CM (Diagnosing codes).
- ICD-10-PCS (Procedure codes for inpatient hospital settings).
- HCPCS Level II (supplies, equipment, and specific facilities).
- Revenue Codes (to indicate departments or services charges).
- DRGs (Diagnosis-Related Groups for inpatient repayments).
The use of ICD-10-PCS and DRGs differentiates institutional claims potentially from professional claims. These coding sets detail the types, severity, and resource intensity of inpatient facilities.
Professional Billing
Professional claim use:
- ICD-10-CM (Diagnosis codes).
- CPT codes (Procedures and physicians’ facilities).
- HCPCS Level II (Additional supplies/ services).
- Modifiers (To clarify procedures, indicate multiple providers, or specify unusual facility circumstances).
CPT codes – owned by the American Medical Association, which are the backbone of the experts’ billing because they describe medical, surgical, and diagnostic services rendered by personnel providers.
Billing Process Distinctions
Institutional Billing Process
Institutional billing generally includes more complicated workflows:
- Patient registration and insurance verification.
- Charge capture across multiple departments.
- Utilize code teams to assign ICD-10-PCS and DRGs.
- Calim creation on the UB-04.
- Revenue integrity audits and compliance checks.
- Submission to insurers.
- Payment posting and denial maintenance.
It is because facility bills include multiple facilities and departments, mistakes that can lead to potential financial consequences. While less complications, professional claims need careful use of modifiers and coding accuracy.
Professional Billing Process
Professional billing is generally more streamlined:
- Provider documentation.
- Coding with CPT/HCPCS and ICD-10-CM.
- Claim creation on CMS-1500.
- Clearing house submission.
- Payment posting
- Denial and appeals management.
Key Differences at A Glance
| Category | Institutional claims | Professional claims |
| Form | UB-04 (CMS-1450) | CMS-1500. |
| Who bills | Individual | |
| Coding | ICD-10-CM, ICD-10-PCS, HCPCS, revenue codes, and DRGs. | ICD-10-CM, CPT, HCPCS, modifiers. |
| Services | Facility level services. | Provider-level Factilities. |
| Reimbursement | PPS, DRGs, APCs, per diem | Fee schedules, RVUs. |
| Complications | High | Moderates |
At Docvaz Medical Billing: Maximize Your Revenue And Minimize Stress!
If you are ready to experience reliable, accurate, and professional medical billing services, our expert coders invite you to DocVaz Medical Billing Company. Our team is devoted to providing efficient, detail-driven solutions, addressed to your company’s unique requirements. Whether you need instruction on institutional claims, professional claims, or revenue cycle management, we are here to support and streamline your processes and improve your financial performance.
Reach out to schedule your meeting and let us take the severity of healthcare billing – so you can stay concentrated on delivering the proper patient care.
