Difference Between Medical Office Billing and Hospital Billing

Medical billing is an umbrella term for all the billing, coding and insurance-related administrative tasks that are performed in a hospital. In simple language, it is suggestive of the hospital’s streamlined system to generate bills. However, when it comes to types of medical billing one may come across terms like medical office billing and hospital billing. These two terms are used for completely different purposes in the billing process.

So what is the definition and purpose of medical office billing and hospital billing?

Medical Office Billing

Medical office billing or professional billing is performed to bill the claims for the work done by physicians, suppliers, non-institutional providers. It focuses on both in-patient and out-patient services. The medical billing office is responsible to perform administrative tasks associated with medical practice. These tasks may include greeting patients, check-in and registration, scheduling appointments, collecting payment, etc.

The medical office biller is required to be trained in both medical billing and collection services. The billing form used in medical office coding is 837-P or CMS-1500. The 837-P is electronic form whereas CMS-1500 is the paper equivalent of the same.

Hospital Billing

Hospital billing or institutional billing is performed to bill the claims for the work done by skilled nurses, hospitals and other institutions for in-patient and outpatient services. It also included billing the claims for medical facilities like the use of medical equipment and supplies, radiology and laboratory services, etc. The institutional billing is responsible for billing and collections only.

The medical biller trained for institutional billing is experts in billing. However, he/she may not necessarily know medical coding. The billing form used in hospital billing is 837-I or UB-04. The 837-I the electronic form whereas UB-04 is the paper equivalent of the same.

Both medical office billing and hospital billing play an equal role in boosting the revenue cycle by billing all the necessary claims. Unbilled claims tend to affect the finances of the hospital as they don’t invite compensation for the medical care services offered by the hospital. This means untrained medical billers are likely to cause more harm by generating false/mistyped bills. Therefore, hospitals prefer to outsource medical billing services from a renowned medical billing company. The advantage of outsourcing medical billing services ensures the assistance of a certified medical biller.