The Major Differences Between Physician and Hospital Billing

How Medical Biller Job Duties Differ Between Settings

If you're looking into a career in medical billing, it is important to understand the nature of the job in different types of facilities.

There is an absolute difference in billing between healthcare and other industries, and most medical billers will tell you there are significant differences in the processing of medical claims across different specialties and facility types.

In medical billing, there are two different types of billing—professional billing and institutional billing.

Professional Billing
  • Often perform both billing and coding

  • Bills using CMS-1500 form or 837-P

Institutional Billing
  • Perform billing and possibly collections, no coding

  • Bills using UB-04 or 837-I

Professional Billing

Medical biller reading a chart and working at a computer

Jetta Productions / David Atkinson / Getty Images

While most tasks performed by the medical office are the same across all medical facility types, medical billing is not.

A medical office handles the administrative tasks for a medical practice, including greeting patients, scheduling appointments, check-in and registration, collecting money, and a number of other tasks including medical billing.

Professional billing is responsible for the billing of claims generated for work performed by physicians, suppliers, and other non-institutional providers for both outpatient and inpatient services.

Forms Used

Professional charges are billed on a CMS-1500 form. The CMS-1500 is the red-ink-on-white-paper standard claim form used by physicians and suppliers for claim billing.

While some claims are currently billed on paper, Medicare, Medicaid, and most other insurance companies accept electronic claims as the primary billing method. The electronic version of the CMS-1500 is called the 837-P, the P standing for the professional format.

Duties in This Setting

Professional medical billers often have different job duties than institutional medical billers. Professional medical billers are often required to know both billing and coding.

Most medical billing training programs offer medical billing and coding together. The majority of these training programs tend to teach more coding than billing.

Medical billers can get on-the-job training for billing but most practices require that billers have at least a coding certification. Billers may also be responsible for charge entry and collection of payments from insurers and patients.

Institutional Billing

Institutional billing is responsible for the billing of claims generated for work performed by hospitals, skilled nursing facilities, and other institutions for outpatient and inpatient services, including the use of equipment and supplies, laboratory services, radiology services, and other charges.

Forms Used

Institutional charges are billed on a UB-04. The UB-04 is the red ink on white paper standard claim form used by institutional providers for claim billing. The electronic version of the UB-04 is called the 837-I, the I standing for the institutional format.

Duties in This Setting

Institutional billers sometimes have different tasks than professional billers. Institutional billers are mostly likely only responsible for billing or perform both billing and collections.

Hospital coding is a lot more complex than physician coding, so the coding of institutional claims is performed only by coders.

Duties and Skills

Regardless of whether it is professional or institutional billing, medical billers have an important job. In order to be successful all billers must learn about five key areas:

  1. In order to submit medical claims efficiently, medical billers need to know or have access to lots of information for each insurance company.
  2. Medical billing staff has access to private, confidential patient health information and must know how to avoid violating HIPAA privacy and security rules.
  3. Familiarity with the billing software being used will save time, minimize errors, and prevent headaches. Take advantage of the training software providers offer and, if necessary, contact them when issues arise.
  4. Understanding coordination of benefit information means knowing how to bill claims in the correct order to prevent a delay in payment.
  5. Each part of a medical claim represents the information that is collected from the time the patient schedules an appointment until the patient receives services.
2 Sources
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Centers for Medicare and Medicaid Services. Professional paper claim form (CMS-1500).

  2. National Uniform Billing Committee. Subscription information.

By Joy Hicks
Joy B. Hicks, PhD, MBA, is an expert on the health insurance industry with over 15 years of experience in patient financial services.