How Vital is a Clearinghouse to Claims Processing?

Time and time again, claims processing can have its highs and lows. The high will be the success of receiving prompt payment for a large volume of submitted claims. The low would be the pile of rejections kicked back from the insurance payer due to numerous errors. So, what process helps providers submit a greater volume of clean claims and also receive a timely response to rejected files: a clearinghouse!

The clearinghouse is a middleman between the provider and the insurance company. With the use of medical practice billing software, their role is to filter claims and provide a “clean claim” or “acceptable” claim to the insurance payer. The file transmission by the clearinghouse must be HIPAA compliant. But, the clearinghouse will not provide a guarantee of payment. It is still the responsibility of the provider to place accurate information and conform to the patients health plan regarding payable services.

 Providers who use a clearinghouse to submit electronic claims:

  • Can upload and save patient demographic information to create new claims quickly instead of manually keying each patient over and over again
  • Claims are able to batched for submission rather than sending one at a time
  • Are able to submit to a large variety of payers
  • Receive faster reimbursement from the payer versus the waiting period on a paper claim
  • The claims inventory can be handled in one central location
  • Receive a status message from the payer stating if the claim has been accepted or rejected

But there are a few disadvantages of a clearinghouse:

  • Providers will call the clearinghouse to explain error details from the payer. Providers should always speak with insurance payer to review the reason for a rejection. ( A clearinghouse does not pay claims for the provider.)
  • Providers are not technically trained to handle complex file transmission errors and must rely on trained a customer service representative from the clearinghouse or their software provider to fix it. A software provider may charge for customer service, so the provider will call their clearinghouse for technical support. ( The clearinghouse is not the manufacturer of your medical billing/practice management software.)
  • Changes in personnel can cause a provider to be locked out of their account. This can cause a delay in file transmissions to the payer. The owner should always have access to their clearinghouse account. (The owner should educate themselves on how to appoint privileges to staff on their account and terminate the access once a staff member resigns.)
  • Each time a provider wants to send payment to a new payer, paperwork may be required in order for the payer to accept the claim file.
  • Poor training or inexperienced personnel of the on software can lead to claim submission errors

So What is the First Step for a Provider to Submit Electronic Claims?

  • The provider will need to purchase a compatible practice management/billing software. Medisoft is widely known as a reliable practice management software.
  • The software must meet HIPAA standards.
  • The software should offer a reliable revenue cycle management, provide current procedure tables, handle all aspects of your practice from billing to scheduling
  • Find out feedback from other customers who use the software: learn the pro’s and con’s before your purchase
  • Educate yourself on the software, see if the service manufacturer offers a free trial for you to test out the product
  • Inquire with the manufacturer to see if a representative can come to your facility to train staff on the software
  • Make sure the software is able to submit electronic claims

Selection of a Good Clearinghouse

  • Nationwide access: Select a clearinghouse who offers more than just regional access.
  • Payer list: The clearinghouse should have an accessible listing of all the payers with valid payer codes for claims submission
  • Your medical billing software should be compatible to the clearinghouse. But you must check.
  • Make sure the clearinghouse offers advanced services, like claims status reports, Electronic Remittance Advice(ERA) for multiple payers, ability to print paper claims, check patient eligibility, and secondary claims processing for Medicare and COB patients.

Who are the Clearinghouse Companies?

There are many clearinghouse organizations who submit electronic claims. It is up to you to research the company and get customer feedback regarding the reliability and their overall performance. Here a few well-known companies:


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