MHRCM Solutions


(+1) 512 800 6431
(+1) 270 495 3261



Suite 101, 1250 S A W Grimes Blvd, Round Rock, Texas - 78664, USA

MHRCM Solutions


(+1) 512 800 6431
(+1) 270 495 3261



Suite 101, 1250 S A W Grimes Blvd, Round Rock,
Texas - 78664, USA

Professional Billing and Institutional Billing: What’s the Difference?

By  Elena Kinsley

No matter how many years pass, the new healthcare regulations keep coming in the complexity of Medical Billing, and the challenges that healthcare practices have been facing stay the same. In fact, the new one, like Surprise Medical Act, is on its sequential. Healthcare providers have to consider many things when it comes to Revenue Cycle and Cash Flow. The one essential aspect of operating a healthcare clinic is Medical Billing.   

However, those who strive to operate a practice, often do so because they want to deliver their patients quality care, rather than because they want to pore over Medical Financial Records.   

However, without an actual understanding of Medical Billing, you won’t keep your healthcare’s lights on long enough to establish your practice as a worthy care provider. Yet, Medical Billing is considered the pillar of any healthcare clinic. What type of Medical Billing is appropriate for you? Which one works best?   

This article will provide a detailed guide on Medical Billing, different Medical Billing, and the best one for your center.   

 Institutional Billing and Professional Billing

What is Professional Medical Billing? 

Medical coverage holders who receive services or treatments from doctors or other healthcare providers are billed professionally. Physician Billing is the term used to describe Professional Medical Billing for the same purpose. A medical office takes care of various administrative duties for a medical practice, including visiting patients, scheduling consultations, verifying patient information, collecting payment, and providing additional services like medical invoicing. 

Professional Medical governs a number of administrative tasks associated with medical offices, including appointment scheduling, patient greetings, registration and verification, and payment processing. Extremely specific in-patient and out-patient treatments will be billed to the patient’s insurance plans. Thus, documentation is necessary. 

What is Institutional Medical Billing?

The process of charging claims for inpatient and outpatient services rendered by hospitals or healthcare organizations is known as Institutional Medical Billing. Hospital Billing is also sometimes referred to as Institutional Medical Billing for the same reason. 

The services rendered by licensed nurses are also covered by Hospital Billing. Additionally, it bills claims for medical services like imaging, lab testing, medical equipment, supplies, etc. Sometimes Institutional Medical Billers are given duties that are different from those of Professional Medical Billers. Most Institutional Medical Billers only handle Billing or both Billing and Collections. Critical responsibilities for Institutional Medical Billers include Collecting, Charging, and Billing.  

Characteristics of Professional Medical Billing and Institutional Medical Billing 

Whether Professional Medical Billers or Institutional Medical Billers, they both play an essential role in the healthcare business. All Billers should be aware of the following areas. 

  • For every insurance company to submit medical claims successfully, healthcare experts have access to vast volumes of data. 
  • Medical Billing personnel who possess access to internal, confidential patient health information should be familiar with HIPAA Privacy and Security Regulations. 
  • Knowledge of the Billing System saves a lot of time, lowers errors, and eliminates difficulties. 
  • Comprehending the incorporation of benefits information entails understanding how to accurately charge claims in order to avoid payment delays. 

Most Significant Difference – Professional Medical Billing Vs Institutional Medical Billing 

Well, when we compare their surface-level description, you won’t be surprised much because there might not be much difference between Professional and Institutional Medical Billing. However, if we look closer at their purposes and how Medical Billers perform them, minor variances begin to separate them. We don’t intend to stuff you with much undesirable information, either. 

Differing Forms

Forms for Professional and Institutional Medical Billing must be filled out differently, requiring specific knowledge to do so successfully. 

 On the other hand, either a UB-04 or an 837-I Form—the latter being the electronic equivalent of the former—is required for Institutional Medical Billing. 

Roles Addressed

The most obvious distinction between Professional Medical Billing and Institutional Medical Billing is how each technique completes claims for various jobs and industries. 

Professional Medical Billing mostly deals with doctors who operate in private practices, rather than hospitals and administrative medical jobs. Therefore, you must use either a CMS-1500 or an 837-P Form to submit claims for those positions. Hospital Doctors and Medical Personnel providing laboratory services require one of the two Institutional Medical Billing Forms.  

Different Types of Claims for Professional Medical Billing and Institutional Medical Billing

There are various types of Medical Claims. We shall now examine the Professional Medical Billing and Institutional Medical Billing Claims Categories of Medical Billing. 

1. Professional Medical Billing Form CMS-1500

A Professional Billing Form is CMS-1500. The 837-P, which is the CMS 1500 Form’s Electronic Replacement, is used for Professional Medical Billing. In the Professional Configuration, the letter “P” is used. 

2. Institutional Medical Billing Form UB-04 

The UB-04 Form is used to Bill Institutions. Institutional Medical Billing for Electronic Claims uses the 837-I Form. The letter “I” stands for the Institutional arrangement.

Pros and Cons of Each Type of Billing 

Every Type of Billing has Pros and Cons. The doctor is in control of your treatment and can decide which tests or procedures to order when Institutional Medical Billing is used. They may be able to negotiate a lower rate than the hospital and they are also in charge of Billing you. With Professional Medical Billing, however, you might need to pay for services in advance, and then wait for your insurance provider to repay you. 

When an Institution Bills you, the facility handles your medical care. The Hospital might order more diagnostic tools and treatments than are actually required, which would raise the price of your treatment. However, the hospital typically pays for any ordered tests or procedures under Institutional Medical Billing. If the Hospital Bills you, you might also have a better chance of getting your insurance provider to cover your care. 

The optimal charging method for you ultimately relies on your particular circumstances. Professional Medical Billing might be the ideal choice, if you have a solid relationship with your Doctor and trust them to order the required tests and procedures. However, Institutional Medical Billing might be your best bet, if you want the comfort of knowing that the Hospital is in charge of your care.

Which Type of Billing is Best for You

In terms of revenue distributions or reimbursements, Professional Medical Coding and Hospital Billing Services stay different at each level. Moreover, their protocols play an essential role in reducing Claim Rejection and Fraud. A Professional Biller’s primary responsibility is to ensure that no Claims or Services go unpaid or unnoticed. Workers must be mindful of Medical Billing and Coding difficulties while reporting Claims, though. Numerous factors, including technology flaws, might cause problems.  

Back to the question of which is better for your healthcare center? It depends on your circumstances. If you have insurance, going via your Institution might be simpler, since they can communicate with your insurance provider. However, Professional Medical Billing may be a better choice, if you don’t have insurance, or if you’re paying out of pocket, because you may discuss the cost with the doctor directly. 

Now, out of the points, from our experience we suggest the Professional Medical Billing Services for your healthcare needs. This is because Medical Billing is difficult to handle even when you know the differences between Professional and Institutional Medical Billing. However, with assistance from MHRCM’s Medical Billing Professionals, you won’t have to do it alone.  

The most efficient method to manage your clinic’s finances is to consult with Our MHRCM Team. We not only offer the greatest Billing Software and a Team of Certified Billing Specialists, but we also appreciate how crucial it is to have access to confidential patient data. So that it is secure, we will handle that access with the same care that you would.


What is professional medical billing?

Professional medical billing is the process of submitting claims for services rendered by individual healthcare providers.

What is institutional medical billing?

Institutional medical billing is the process of submitting claims for services provided by healthcare facilities, such as hospitals and clinics.

What are some key differences between professional and institutional medical billing?

Professional medical billing focuses on individual services and providers, while institutional billing involves billing for facility-based services. Additionally, institutional billing is typically more complex and involves more detailed coding requirements.

What are some common challenges associated with professional medical billing?

Common challenges in professional medical billing include managing denials and claim rejections, keeping up with changing regulations and payer requirements, and managing the revenue cycle effectively.

What are some common challenges associated with institutional medical billing?

Common challenges in institutional medical billing include managing the complexity of the billing process, ensuring accurate coding and documentation, and managing denials and appeals effectively.

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About the Author

Elena Kinsley

Elena Kinsley is a seasoned Content Strategist and Chief Technology Officer (CTO) specializing in medical revenue cycle management (RCM).

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