If you’re running a healthcare practice, chances are you’ve already realized that good medicine alone doesn’t guarantee a healthy business. Behind every patient interaction lies a process that determines whether your practice stays financially stable—and that process is medical billing.
But here’s the kicker: medical billing isn’t all the same. Depending on the type of care you provide, the billing method, codes, documentation, and even the submission forms can vary significantly. Getting this wrong can mean delays, denials, and lost revenue. Getting it right? That’s where financial success begins.
Let’s break down the key types of medical billing and how they impact your revenue cycle management (RCM).
What Exactly Is Medical Billing?
Medical billing is the administrative process of translating a patient’s care into a standardized claim submitted to an insurance provider. This claim includes:
- Verifying the patient’s insurance
- Assigning diagnosis and procedure codes (ICD-10, CPT)
- Adding any necessary modifiers
- Submitting claims to Medicare, Medicaid, or commercial payers
- Managing denials or rejections
- Posting and reconciling payments
Even a simple typo in this process can hold up reimbursement. That’s why many providers turn to Medical Billing Professionals to reduce errors and improve payment timelines.
Why the Right Billing Type Matters
Each type of care—be it virtual visits, in-office procedures, or emergency transportation—requires a different billing structure. That includes different codes, documentation requirements, and submission rules.
Using the correct billing type helps you:
- Prevent rejections and denials
- Comply with payer-specific guidelines
- Shorten accounts receivable (A/R) timelines
- Increase clean claim rates
- Improve overall financial performance
Let’s explore six essential medical billing types and how they shape your revenue cycle.
- Telehealth Billing: New-Age Care, New-Age Rules
Telehealth services have grown exponentially, but their billing isn’t as simple as plugging in a video call.
Every telehealth claim should:
- Use the right CPT codes for remote services
- Include modifiers like 95 or GT
- Follow insurer-specific telehealth rules and documentation requirements
Even though telehealth is widely accepted now, insurers still vary in what they’ll pay for. Staying updated is key—and CMS is a great place to start for Medicare rules.
- Professional Billing: The Most Common Outpatient Model
Professional billing is used by individual healthcare providers, such as physicians, specialists, and physical therapists, for services provided outside of a hospital setting. These claims are submitted using the CMS-1500 form.
What does this include?
- Office visits
- Consultations
- Preventive screenings
- Physical or occupational therapy
Professional billing is relatively simple—but small errors like using outdated codes, skipping necessary modifiers, or missing documentation can lead to denials.
- Institutional Billing: For Hospitals and Large Facilities
Institutional billing is used by healthcare facilities—like hospitals, rehab centers, and nursing homes. These claims are more complex, submitted via UB-04 forms, and often include a wide range of services.
An institutional claim might cover:
- Room and board
- Lab and imaging services
- Surgery and anesthesia
- Supplies and medications
Because the claim spans multiple departments, coordination is key. If any piece is missing or incorrectly documented, the entire payment can be delayed.
- Dental Billing: Expanding Beyond Dental Insurance
Most dental practices use CDT codes for claims, which are submitted to dental insurance providers. But what many don’t realize is that certain dental procedures are eligible for medical insurance reimbursement as well.
Examples include:
- Surgical extractions
- Biopsies for oral pathology
- Facial trauma repair
- Sleep apnea devices
These procedures must be cross-coded using CPT and ICD-10 formats—and insurance eligibility must be verified on the medical side.
The American Dental Association (ADA) provides guidance, but it’s often easier to work with experts
- Pharmacy Billing: For In-Office Drug Administration
If your practice administers medications—like vaccines, injections, or infusions—you’ll need to submit pharmacy billing claims. These involve:
- Listing the correct NDC code
- Including dosage, units, and route of administration
- Providing medical justification for the medication
One of the most common mistakes? Using an incorrect or outdated NDC, which can lead to denials or reimbursement clawbacks. The FDA’s NDC Directory is a must-use reference.
- Ambulance Billing: Complex and Highly Regulated
Billing for ambulance transport is among the most regulated billing types. Claims must include:
- Medical necessity and condition of the patient
- Type of transport (e.g., Basic Life Support or Advanced Life Support)
- Mileage and travel time
- Pickup and drop-off locations
- Provider credentials
CMS outlines strict ambulance billing rules through its Ambulance Fee Schedule, and errors can trigger audits or denials.
How These Billing Types Impact Revenue Cycle Outcomes
Every billing category influences your revenue cycle in unique ways:
- Telehealth and professional billing are faster but need exact coding
- Institutional billing is slower and more complex, requiring coordination
- Dental and pharmacy billing offer growth potential, but only if done right
- Ambulance billing is compliance-heavy and error-prone without strong documentation
The common thread? When billing is handled correctly, you get paid faster, see fewer denials, and boost your revenue.
Final Thoughts: The Smarter Way to Handle Medical Billing
Each practice has different needs, depending on its services, specialties, and patient volume. Managing billing in-house can be overwhelming—especially when juggling multiple billing types.
That’s why outsourcing to a company can provide:
- Expert coding by specialty
- Real-time claim tracking
- Denial prevention workflows
- Better compliance and reporting
Getting paid shouldn’t be the hardest part of healthcare. By understanding which billing types apply to your practice and managing them properly, you can secure faster payments, fewer denials, and a more sustainable operation.
Need support? Visit acerhealth.com to explore how our services can help.
