According to research, there are two types of Medical Billing – Professional Billing and Institutional Billing. Knowing the pros and cons of each type can help you decide which medical billing company to use. Here’s a brief description of professional and institutional billing.

Professional Medical Billing

It is when a medical billing company contracts with individual medical practices to provide their medical billing services. The medical billing company will then staff employees who are trained in medical billing and coding to work in the medical practice. Below are the pros and cons of using a professional medical billing company.


  • Professional medical billing companies have knowledgeable and experienced medical billing staff.
  • They can provide medical billing services for multiple medical practices, which means you don’t have to hire your medical billing staff or outsource medical billing to third-party providers.
  • Professional medical billing companies often use the latest medical coding software, helping them process claims quickly and accurately.


  • Medical practices may need to invest in computer systems and other tools to support professional medical billing services from a third-party provider.
  • Professional medical billing companies typically charge fees based on the volume of claims, so some medical practices feel that an hourly or fixed fee for their services would be more cost-effective than paying per claim processed.

Institutional Medical Billing

This type of medical billing is used by medical institutions such as hospitals and medical clinics. Unlike professional medical billing companies, institutional medical billing refers to a hospital or clinic’s internal medical billing processes.


  • Institutional medical billing typically involves fewer steps than using a third-party provider, as most processes can be automated with software or other tools.
  • Institutional medical billing is generally more cost-effective than outsourcing your medical billings to a third-party provider.
  • Institutions may have dedicated teams of trained medical billers and coders on staff who are familiar with the specific needs and requirements of their organization’s policies and procedures.


  • Medical institutions may need to make a large upfront investment in medical billing software and hardware.
  • Institutional medical billing can be complex, making it difficult for medical practices to switch from using a third-party provider.
  • Training staff on using new medical billing software and systems can be time-consuming and expensive.

Overall, both professional and institutional medical billing have their advantages and disadvantages. Ultimately, the best medical billing solution for your practice will depend on several factors, including the size and scope of your medical practice or institution. So, consider your organization’s needs when making your decision about which medical billing company to use. To learn more about medical billing and medical coding, contact our medical billing experts at our medical billing company.