What is the difference between physician and hospital billing?

Answer 1

Medical billing and physician billing are often used interchangeably. Medical billers take the coded medical record, and bill the insurance company. Medical billers work in doctors' offices, clinics, and hospitals. It is possible for a medical biller to work at home as well.

Answer 2

Physician BillsThe physician bills for the services she provides. In her office, that would be the physician services during the office visit and exam, any lab specimens she collects and/or studies performed, any minor procedures or surgeries, etc.

For services provided at the hospital, she bills for only what was done and not for any of the supplies used or room charges, etc. So that would be charges for each hospital visit and exam of you in the hospital, surgery or procedures done while you were there, and/or consultations.

The physician bills are usually submitted on a standardized form called a Universal Billing Form and the Diagnoses and Services are codified for the form. For reporting Diagnoses, they currently use the International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM) coding system. However, the new ICD-10 revision is due out in 2014 to be used in place of ICD-9 for billing all diagnostic codes. For the billing of physician services, ancillary services, and procedures performed, they typically use the CPT coding system (Common Procedural Terminology, an American Medical Association coding scheme) or HCPCS codes (The Healthcare Common Procedure Coding System) which are used for billing these charges on claims for Medicare and Medicaid beneficiaries. HCPCS is often referred to as "Hick Picks" coding and was based on the CPT coding scheme specifically for use in Medicare billing purposes. Less commonly, HCPCS coding may be required for billing to specific private insurance companies, although most usually use CPT codes today.

Payment to physicians is usually made according to a Reasonable and Customary (R&C) charge based on aggregated data from multiple insurers. Or, where a provider has agreed to participate as a "plan physician" in an insurance plan provider network, they are often paid according to a fee schedule assigned for each CPT code or HCPCS code, which is based upon similar aggregate data and the fee schedule is included in contract terms with insurance companies. Physicians will accept these slightly lower payment rates in return for having patients directed to them through a network referral system. In some contract arrangements, they are paid by capitation, which is a flat rate per person who has selected them as the managing primary physician or Primary Care Physician (PCP). Medicare and Medicaid pay according to their own government-determined fee schedules as well.

Hospital BillsThe hospital submits bills for an inpatient stay with the daily charges for the room, which includes meals, some of the routine supplies used and the nursing services, charges for use of the Emergency room and the personnel there, charges for each time unit that you spent in an operating room plus the supplies used while in the OR, for diagnostic procedures performed like X-rays and labs, medications given while you were there, and therapies, like physical or respiratory therapy, hyperbaric oxygen services, wound care, etc.

Payment is made either according to an R&C (reasonable and customary) amount based on industry data, or by contract with different insurance companies, for different payment in different ways, with whom the hospital has made agreements. Medicare and Medicaid pay typically by a Prospective Payment System (PPS) that pays in advance by projection of the anticipated number of cases of different types that are anticipated to be treated by the hospital over the forthcoming contract term, based upon historical data at that facility. The PPS payment is reconciled later with a flat rate per type of case, called DRG Payment (Diagnosis Related Groups). DRGs are based on the combination of diagnoses and procedures that are involved in the care provided to a specific patient during a hospital admission.

For hospital outpatient services, the bill is similar, except there are no room charges, just the ancillary services, supplies, use of special surgical rooms for a specified amount of time, and medications, gases (oxygen, etc.) and anesthesia. Nursing services are included in these OP facility billings and not charged separately.

For inpatient and outpatient services provided in hospital facilities, Anesthesiologists, Radiologists, Emergency Physicians, and sometimes Pathologists and Anesthetists, usually bill separately from the hospital in the way the physician services are paid above using CPT codes, etc. In some facilities, especially some University teaching hospitals, these types of ancillary physicians are employed by the hospitals as staff, and their services are included on the hospital claim, rather than billed separately as individual providers.

The hospital uses a billing form that is a standardized form developed by the Federal government for Medicare claims and called a UB-04 (Universal Bill, 2004) which contains the codified diagnoses, ancillary services and room charges for the number of days in the different types of care units. The billing process includes use of a specific set of data for giving the best accounting of the services provided and justification of the charges. This is called the Uniform Hospital Discharge Data Set (UHDDS) and specifies the definitions of billable diagnoses for use with the DRG payment system. The Data Set includes: general demographic information, the designation of the expected payor(s), identification of the hospital with their name and other specific identifiers such as their Federal tax ID number (TIN) and/or an identifier for them as an in-network plan provider for private insurers, the PPS payment system's DRG coding scheme's Principal Diagnosis and Other Diagnoses (defined by the UHDDS) that have specific significance according to billing and coding guidelines for reporting, and all ICD-9-CM-coded significant procedures for the purposes of grouping the case to the appropriate DRG (Diagnosis Related Group) for the type of case, upon which payment amounts are based.

The code system that is used to explain what the diagnoses and services were is the ICD-9-CM Diagnosis and Procedures codes (International Classification of Diseases, 9th Revision, Clinical Modification, although ICD-10 will be implemented in 2014). Some contracts may require hospitals to use other coding schemes for the ancillary services and surgical procedures, which may be HCPCS (Healthcare Common Procedure Coding System, a US Government coding system) or CPT codes. CPT stands for Current Procedural Terminology, an American Medical Association (AMA) coding scheme publication.

These systems for reporting services provided using the codified information with application of official coding guidelines is intended to assure accurate and ethical coding. Many payors (Medicare and most major private insurance plans), that use the PPS DRG system, employ or contract with outside doctors and nurses to validate some of the bills for proper coding, based on the Medical Record documentation. If there are discrepencies in the reported codes, overpayments are reconciled in the next PPS prospective payment or collected directly. This allows for fraudulent or erroneous billing practices by providers to be identified.