A Smarter Class of Clearinghouse

Posted by Patrick Bores on October 17th, 2023
Patrick Bores
Patrick is the Chief Information Officer and product and technology development leader with over two decades of experience in the healthcare industry. As a healthcare automation expert, he spearheads innovative AI/ML solutions to improve accuracy, efficiency, and cost-effectiveness. He graduated from the University of Minnesota in Computer Science and is a Certified Information Systems Security Professional.

The healthcare landscape is crisscrossed by an invisible highway system, jam-packed with the constant exchange of digital information between payers and providers. Without third parties to direct traffic and prevent pileups, these information highways would inevitably grind to a halt. Preventing this gridlock disaster is the job of healthcare clearinghouses, software-driven digital hubs that securely connect payers to providers, route data efficiently, and thus enable the swift administration of healthcare insurance.

While most sizeable healthcare organizations rely on clearinghouses for daily operations, they may not fully understand how they work. In fact, clearinghouses are widely viewed as providing a commodity service, leading many payers and providers to choose the lowest-cost partner without another thought. But that could be a mistake, as today’s healthcare clearinghouses can vary dramatically in terms of service and capabilities. Powered by automation technologies and artificial intelligence (AI), a modernized clearinghouse can help companies further their digital transformation, maximize operational efficiencies and create more value for their patients and customers.

Useful but limited

Only two decades ago, the healthcare system was largely administered via paper forms sent through the U.S. Postal Service. While paper still has its place in the process, interactions between payers and providers have accelerated substantially with the widespread adoption of electronic medical records (EMR) and administrative transactions in conjunction with general technological advancement (high-speed internet, mobile devices, etc.). Clearinghouses, for their part, are able to facilitate millions of transactions between thousands of organizations, sent in a myriad of different formats. Processes that used to take days or weeks occur almost instantaneously.

As far as the industry has come, however, it still has plenty of room for improvement. For the most part, clearinghouses serve as transit hubs to get information from point A to point B, performing basic data validation to catch missing data or incorrect formatting. But the process is far from seamless, as many transactions still fail to comply with payer-specific requirements, resulting in claims rejections or denials. These issues require employees to get involved, return or rework forms, and engage in time-consuming back-and-forth via phone calls or email. At the same time, many clearinghouses aren’t interoperable with the wide variety of EMR systems used by different organizations. Consequently, payers and providers may have to enlist the services of multiple clearinghouses to make all the connections they need, which further increases costs and complexity.

These and other clearinghouse problems can be addressed through more advanced software solutions, allowing payers and providers to streamline their processes and cut costs.

Time for an upgrade

As innovation marches on, today’s cutting-edge technologies are redefining what healthcare clearinghouses can do. Empowered by automation, AI and machine learning, a clearinghouse can become much more than a mechanical means of conveyance; it can play an active role in driving efficiency and enhancing business performance. Specifically, here are a few of the capabilities giving payers and providers reasons to rethink the status quo.

Taken together, such robust and sophisticated clearinghouse capabilities translate to valuable business outcomes: faster claims submission and payment processing, higher quality of patient/member service and lower operating costs. In turn, companies may also find opportunities to reduce staffing needs or reassign employees to more rewarding, customer-focused roles.

Enabling freedom of choice

One of the greatest impacts of the digital revolution has been disruptive innovation in nearly every industry, as technology has lowered barriers to entry and enabled trailblazing companies to challenge longstanding incumbents.

Healthcare clearinghouses are no exception to these changing rules. For many years, customers have lacked sufficient choices, feeling locked in to relationships with large incumbent vendors for fear of losing electronic connectivity with important partners. Once again, however, technology has leveled the playing field. Today’s healthcare organizations have high-quality options for clearinghouses that can not only meet their basic technical requirements without business disruptions, but also heighten their performance through modernized software.

Moving from simplistic to simplified

As advanced technologies accelerate and enhance nearly every aspect of business operations, it’s time for healthcare organizations to demand more of their clearinghouse service. The power of AI and automation can take clearinghouse solutions beyond their basic functionality and help companies streamline some of their most arduous and repetitive processes. Ultimately, a smarter class of clearinghouse will create a better, more efficient healthcare system for providers, payers, and the millions of patients they serve.

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