The process of medical billing is the financial mechanism that allows healthcare providers to receive payment for the care they deliver. Navigating this system requires understanding different claim types used to request reimbursement from insurance companies and government payers. An institutional claim is a distinct, standardized submission that facilities use to seek payment for a patient’s medical encounter.
Defining Institutional Claims
An institutional claim is a formal request for payment submitted by a healthcare facility, rather than by an individual doctor or other practitioner. These claims cover the costs associated with the facility’s operations and resources used during a patient’s care. The entities that file these claims include hospitals, skilled nursing facilities, ambulatory surgical centers, hospice centers, and psychiatric facilities.
These claims are designed to bill for the “technical” or facility component of care, such as room and board, nursing services, medical supplies, equipment usage, and laboratory or radiology services. For instance, during an inpatient hospital stay or an emergency room visit, the institutional claim covers the cost of the bed, the use of the operating room, and the medications administered by the facility staff.
The Standard Submission Form
The standardized mechanism for submitting an institutional claim is the UB-04 form, which is also officially known as the CMS-1450 form. The UB-04 is universally accepted by Medicare, Medicaid, and private insurance payers for facility billing.
The UB-04 requires the use of Revenue Codes, which are four-digit codes that categorize the specific type of service, supply, or accommodation provided by the facility. For example, a specific Revenue Code identifies charges for an emergency room visit (Code 0450), while others denote pharmacy charges (Code 0250) or operating room services (Code 0360). The form also requires Condition Codes, which provide information about circumstances that may affect payment, such as accident details or specific patient statuses.
Institutional Versus Professional Claims
Institutional claims are distinguished from professional claims, their counterpart in the billing ecosystem. Professional claims are submitted by individual healthcare providers, such as physicians, surgeons, nurse practitioners, or physical therapists, for their personal services. These claims focus on the “cognitive” or surgical work performed by the provider and are typically filed using a separate document, the CMS-1500 form.
A single medical event, such as an outpatient surgical procedure, often generates both an institutional and a professional claim, leading to two distinct billing submissions. The institutional claim covers the facility costs—including the surgical suite, recovery room, and necessary supplies—while the professional claim covers the surgeon’s fee for performing the operation.