Healthcare Clearinghouse: What it is and How it Can Help

A healthcare clearinghouse is essentially the middleman between the healthcare providers and the insurance payers. A clearinghouse checks the medical claims for errors, ensuring the claims can get correctly processed by the payer. Once clean claims are established, the claims and any associated medical records are sent electronically to all appropriate medical organizations. Clearinghouses also provide the ability to take in non-standard data and process it into standard data formats that can be ingested into the payers’ adjudication system. 

Not to be confused with clearinghouses that facilitate the exchange of payments between banks and financial institutions. Medical claims clearinghouses are different. In healthcare, a clearinghouse is imperative to the processing of all medical claims and records electronically to ensure faster turnaround on claim processing.  

The Problem That Clearinghouses Solve

What are the reasons payers and providers utilize a healthcare clearinghouse? This white paper lays out what makes medical claims clearinghouses so important. It is also an excellent resource for clearinghouse information.

Each day millions of medical claims are filed using thousands of different claims software to send claims to thousands of different insurance carriers across the country, all with various payer-specific edits and regulations. That is some complicated stuff. And even more so,  this all used to be carried out via mail—the USPS. Now, thanks to the adoption of electronic claims processing and HIPAA mandates, the workflow process of claims has become more manageable, by minimizing touch points and having the ability to track claims throughout the claims lifecycle. 

While clearinghouses take the place of many manual methods that once were critical to the processing of medical claims – how can they help your business thrive and streamline processes? Let’s dive in.

They are Industry Experts

Medical claims clearinghouses provide an essential role in today’s healthcare space. Working with a healthcare claims clearinghouse means you’re contracting with an organization that understands claim routing and processing.  Your internal claims processing team may not be able to dedicate all the time and energy they need to learn the ins and outs of the trade that a clearinghouse team would. A medical clearinghouse knows how to communicate between providers and payers; they understand what forms require special treatment and they know how to check quality control. A good quality clearinghouse allows for seamless data exchange between you and your provider networks, improving and speeding up the claims process, which assists in an increase in cash flow.

They are a HIPAA Compliant Entity

Compliant entities include healthcare providers, health plans, and healthcare clearinghouses. This means that they must comply with the HIPAA requirements that protect the security and privacy of sensitive health information. They must also transmit certain rights to those providers and payers regarding their protected health information.

This also means that any business that does business with a covered entity, such as a healthcare clearinghouse, will also comply with the HIPAA guidelines and regulations. This can be done as a signed agreement, like a service level agreement, detailing the business associate’s liability if they do not comply with HIPAA regulations. 

They Focus on Quality Control

A key task of  a medical claims clearinghouse is scrubbing the data on claims to ensure sensitive health information is both accurate and secure. This step takes place after the medical billing claim has been processed through their claims software, after which it kicks out an 837 file, which is the electronic medical claim. This claim goes through the quality control process as they check for errors, inconsistent data elements, and ensures everything is accurate before sending it on to the medical billing clearinghouse account.

Things that a clearinghouse checks for during the quality control process include code or provider discrepancies. They will also ensure patient data is correct, like name, location, age, etc. Sometimes a nickname could end up being counted as a new patient rather than combining it with their existing file. For example, if a patient fills out forms as Jenny, but their full legal name is Jennifer, the clearinghouses make sure those records get combined and not added as a new patient.

They will also check for duplicate or incorrect codes that tell the system what to bill for. Each service must have the correct billing code associated with it for the claim to be accurately processed. Quality control can keep claims from being denied or discharged, which is critical to keeping  workflows streamlined and steadfast.

Take attachments for example. Receiving attachments complicates workflows because they’re an additional piece of paper that must be received and routed. Smart Data Solutions helps Payers who handle secondary claims that require the primary EOB process these attachments digitally. Our portal can receive files from Providers in nearly any format, even proprietary, convert paper to a digital version, also known as an 837, and route the claim appropriately without the need for paper. Chris Mueller, Vice President of Client Solutions, explains more in the clip below. Watch the full video here.

For reference, at Smart Data Solutions, our quality control edits fall into three different categories:

• Data Integrity Edits: Used to “tease out” data entry errors. For example, if the billing “from date” is after the “to date” the claim is subject to a second review.
• Transformation Edits: This includes items such as name parsing and conversion from minutes to units for anesthesiology claims.
• EDI Compliance Edits: This includes enforcement of EDI rules. For example, on a UB an occurrence code must be accompanied by an occurrence date.

They are Your Communication Advocate

A clearinghouse is your #1 resource for any of your questions or issues regarding a claim. Rather than an internal medical billing or accounting department handling your medical claims processing, a clearinghouse can be fully immersed in all things associated with your claims processing. They don’t manage other roles or duties, they’re dedicated to processing, issuing, and disputing claims.

Like we said before, they are the middleman between payers and providers. They know what questions to ask, what forms to file, and how to dispute discrepancies properly. Just by doing what they do, clearinghouses can vastly improve the relationships between providers and insurance carriers. They can quickly resolve problems with streamlined communication, which results in faster payments and fewer denials. The medical claims process becomes incredibly more streamlined and efficient by having a clearinghouse present and communicating properly with all necessary parties. 

They Streamline Busy Workflows

Medical claims clearinghouses can help streamline multiple workflows into one concise platform and service. Filing medical claims and processing bills can take weeks to months when processed manually. Not only do the workflows themselves get streamlined by funneling directly through a clearinghouse, but payments can be processed within days, and denials or disputes can happen much faster.

If streamlining your medical claims process is on the horizon, reach out to Smart Data Solutions to get started. We can make your business more efficient than ever before with streamlined solutions through our EDI/Clearinghouse services. Fill out this form to get in touch!