Mar 29, 2024

Is Physician Billing Different Than Hospital Billing? Here’s the Answer

Home » Is Physician Billing Different Than Hospital Billing? Here’s the Answer

Is Physician Billing Different Than Hospital Billing

Physician and hospital billing are often confused as the same thing, but there are a few significant differences. Both have their own sets of challenges and require special expertise to handle their complexities. A clear understanding of these billing processes is important for financial management, enhanced patient care delivery, and streamlined revenue cycle operations.

Physician Billing Requirements:

Physician billing requires keen attention to detail at the point of care. This includes: 

  • carefully documenting patient visits, 
  • categorizing the services provided, 
  • and noting any sub-codes/modifiers that may be required to ensure complete reimbursement. 

Healthcare providers document every patient visit, demographics, medical history, symptoms, diagnosis, course of treatment, and other relevant data. The alphanumeric medical codes, along with any required additional details, provide all the information used to determine the physician’s reimbursement.

Hospital Billing Requirements:

Hospital billing uses the same set of codes, but is more complex, as it includes the broad range of services provided in hospitals. Hospital billing begins when a patient is brought into the facility and continues until the patient’s final discharge. 

Hospital billing also requires a chargemaster, a sizable database that lists all of the services for which the facility can bill. Healthcare professionals thoroughly document every element of their patient’s treatment throughout their stay, including diagnosis, treatments, procedures, medication, and any additional services provided.

Major Differences Between Physician and Hospital Billing

  • Scale and Scope of Services

Physician billing primarily concentrates on individual patient visits in clinical settings or private offices, so the billing staff will only be required to use a small portion of the code. Hospital billing, however, uses all but the most specialized sections, and larger hospitals may use the entire code set, which requires much more experienced coders and billers. 

  • Documentation and Coding Practices

Hospital billing requires a collaborative approach to documentation and coding. Numerous healthcare specialists work together to ensure full and accurate documentation of patient interactions and performed services. 

On the other hand, physician billing places equal emphasis on the careful recording and coding of patient visits. Doctors or the staff can handle it in their office, and it has a much more focused scope.

  • Revenue Sources and Reimbursement Models

Physician billing primarily involves fee-for-service reimbursement methods. Healthcare practitioners are compensated for each service they deliver under this system based on predefined fee schedules. This arrangement encourages providers to deliver more services because they are compensated depending on the number and complexity of patient visits. 

Hospital billing, on the other hand, uses several compensation methods, such as prospective payment systems (PPS), diagnosis-related groups (DRGs), and value-based reimbursement arrangements. These systems determine reimbursements based on patient diagnoses, duration of stay, and case complexity.

  • Administrative Workflows and Responsibilities

The administrative workflows associated with physician and hospital billing differ significantly due to their respective scopes. Physician billing can be handled within individual practices or medical groups. 

Healthcare providers may manage billing operations themselves or outsource the work to a professional billing company to reduce the time and attention required for managing billing and revenue. 

Hospital billing, on the other hand, has a more complicated administrative structure. Hospital revenue cycle management and billing operations require specialized billing departments or an experienced medical billing service.

Streamline Hospital and Physician Billing

Whether you require physician or hospital billing, you need an efficient process and an experienced billing team. The right support allows healthcare practitioners to receive maximum reimbursements and minimizes the effort it takes to manage their revenue.

Healthcare groups looking to improve their revenue cycle management and billing can benefit from partnering with Medcare MSO. We offer customized billing solutions to match the particular requirements of each healthcare facility or practice. 

Medcare MSO’s successful track record in revenue cycle management assures our clients that they can turn over their administrative billing processes to us and focus their efforts on providing excellent patient care. Our RCM solutions increase efficiency and income potential, allowing our clients to prosper in today’s challenging healthcare environment. 

Give us a call at 800-640-6409 to find out how we can help your practice or facility, or to schedule an appointment for a free AR analysis.

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