diff --git a/erpnext/healthcare/doctype/healthcare_settings/healthcare_settings.json b/erpnext/healthcare/doctype/healthcare_settings/healthcare_settings.json
index b33c326313..ddf1bce492 100644
--- a/erpnext/healthcare/doctype/healthcare_settings/healthcare_settings.json
+++ b/erpnext/healthcare/doctype/healthcare_settings/healthcare_settings.json
@@ -19,6 +19,7 @@
   "valid_days",
   "inpatient_settings_section",
   "allow_discharge_despite_unbilled_services",
+  "do_not_bill_inpatient_encounters",
   "healthcare_service_items",
   "inpatient_visit_charge_item",
   "op_consulting_charge_item",
@@ -315,11 +316,17 @@
    "fieldname": "allow_discharge_despite_unbilled_services",
    "fieldtype": "Check",
    "label": "Allow Discharge Despite Unbilled Healthcare Services"
+  },
+  {
+   "default": "0",
+   "fieldname": "do_not_bill_inpatient_encounters",
+   "fieldtype": "Check",
+   "label": "Do Not Bill Patient Encounters for Inpatients"
   }
  ],
  "issingle": 1,
  "links": [],
- "modified": "2021-01-04 10:19:22.329272",
+ "modified": "2021-01-13 09:04:35.877700",
  "modified_by": "Administrator",
  "module": "Healthcare",
  "name": "Healthcare Settings",
diff --git a/erpnext/healthcare/doctype/inpatient_record/test_inpatient_record.py b/erpnext/healthcare/doctype/inpatient_record/test_inpatient_record.py
index e8a9444fec..10990d412d 100644
--- a/erpnext/healthcare/doctype/inpatient_record/test_inpatient_record.py
+++ b/erpnext/healthcare/doctype/inpatient_record/test_inpatient_record.py
@@ -8,6 +8,8 @@ import unittest
 from frappe.utils import now_datetime, today
 from frappe.utils.make_random import get_random
 from erpnext.healthcare.doctype.inpatient_record.inpatient_record import admit_patient, discharge_patient, schedule_discharge
+from erpnext.healthcare.doctype.lab_test.test_lab_test import create_patient_encounter
+from erpnext.healthcare.utils import get_encounters_to_invoice
 
 class TestInpatientRecord(unittest.TestCase):
 	def test_admit_and_discharge(self):
@@ -42,7 +44,7 @@ class TestInpatientRecord(unittest.TestCase):
 
 	def test_allow_discharge_despite_unbilled_services(self):
 		frappe.db.sql("""delete from `tabInpatient Record`""")
-		setup_inpatient_settings()
+		setup_inpatient_settings(key="allow_discharge_despite_unbilled_services", value=1)
 		patient = create_patient()
 		# Schedule Admission
 		ip_record = create_inpatient(patient)
@@ -64,6 +66,35 @@ class TestInpatientRecord(unittest.TestCase):
 		self.assertEqual(None, frappe.db.get_value("Patient", patient, "inpatient_record"))
 		self.assertEqual(None, frappe.db.get_value("Patient", patient, "inpatient_status"))
 
+		setup_inpatient_settings(key="allow_discharge_despite_unbilled_services", value=0)
+
+	def test_do_not_bill_patient_encounters_for_inpatients(self):
+		frappe.db.sql("""delete from `tabInpatient Record`""")
+		setup_inpatient_settings(key="do_not_bill_inpatient_encounters", value=1)
+		patient = create_patient()
+		# Schedule Admission
+		ip_record = create_inpatient(patient)
+		ip_record.expected_length_of_stay = 0
+		ip_record.save(ignore_permissions = True)
+
+		# Admit
+		service_unit = get_healthcare_service_unit()
+		admit_patient(ip_record, service_unit, now_datetime())
+
+		# Patient Encounter
+		patient_encounter = create_patient_encounter()
+		encounters = get_encounters_to_invoice(patient, "_Test Company")
+		encounter_ids = [entry.reference_name for entry in encounters]
+		self.assertFalse(patient_encounter.name in encounter_ids)
+
+		# Discharge
+		schedule_discharge(frappe.as_json({"patient": patient}))
+		self.assertEqual("Vacant", frappe.db.get_value("Healthcare Service Unit", service_unit, "occupancy_status"))
+
+		ip_record = frappe.get_doc("Inpatient Record", ip_record.name)
+		mark_invoiced_inpatient_occupancy(ip_record)
+		discharge_patient(ip_record)
+		setup_inpatient_settings(key="do_not_bill_inpatient_encounters", value=0)
 
 	def test_validate_overlap_admission(self):
 		frappe.db.sql("""delete from `tabInpatient Record`""")
@@ -89,9 +120,9 @@ def mark_invoiced_inpatient_occupancy(ip_record):
 		ip_record.save(ignore_permissions = True)
 
 
-def setup_inpatient_settings():
+def setup_inpatient_settings(key, value):
 	settings = frappe.get_single("Healthcare Settings")
-	settings.allow_discharge_despite_unbilled_services = 1
+	settings.set(key, value)
 	settings.save()
 
 
diff --git a/erpnext/healthcare/utils.py b/erpnext/healthcare/utils.py
index 96282f50a9..6a499aab7f 100644
--- a/erpnext/healthcare/utils.py
+++ b/erpnext/healthcare/utils.py
@@ -77,11 +77,13 @@ def get_appointments_to_invoice(patient, company):
 
 
 def get_encounters_to_invoice(patient, company):
+	if not isinstance(patient, str):
+		patient = patient.name
 	encounters_to_invoice = []
 	encounters = frappe.get_list(
 		'Patient Encounter',
 		fields=['*'],
-		filters={'patient': patient.name, 'company': company, 'invoiced': False, 'docstatus': 1}
+		filters={'patient': patient, 'company': company, 'invoiced': False, 'docstatus': 1}
 	)
 	if encounters:
 		for encounter in encounters:
@@ -90,6 +92,10 @@ def get_encounters_to_invoice(patient, company):
 				income_account = None
 				service_item = None
 				if encounter.practitioner:
+					if encounter.inpatient_record and \
+						frappe.db.get_single_value('Healthcare Settings', 'do_not_bill_inpatient_encounters'):
+						continue
+
 					service_item, practitioner_charge = get_service_item_and_practitioner_charge(encounter)
 					income_account = get_income_account(encounter.practitioner, encounter.company)