What is a Clearinghouse?

Posted by Stacey Fitzsimmons on July 18, 2018
Stacey Fitzsimmons
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Many providers do not know what a clearinghouse is or how it works.   Here is a breakdown of what a clearinghouse is and how it plays a major part in the billing process.

In medical billing, companies that function as intermediaries who forward claim information from healthcare providers to insurance payers are known as clearinghouses. In what is called claims scrubbing, clearinghouses check the claim for errors and verify that it is compatible with the payer software.  So, in other words a clearinghouse serves as a middleman; for your claims to get sent from the billing software to the insurance companies electronically.

Once the insurance company has received the claim from the clearinghouse they can process the claim.  The claim will either process for payment or process denied for any number of reasons.    

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Another benefit of a clearinghouse is that you can choose to receive the EOB’s (explanation of benefits) electronically through the clearinghouse versus having paper sent through the mail.  If using a clearinghouse, the EOB is renamed ERA (electronic remittance advice).  Once the ERA is sent to the clearinghouse the biller can download and apply payment in the billing system.

Some billing systems have preferred clearinghouses that interface with their systems but many do not so it is up to you to do the research and pick a clearinghouse that will give you the most bang for your buck.

If you are submitting paper claims, it takes longer for insurance companies to process and remit payment, which is why at Account Matters we highly recommend that our clients bill electronically through a clearinghouse with as many insurances as possible. Clearinghouses make it easier for your staff to keep track of claims sent and ERA’s received. If you have any questions regarding clearinghouses, call one of the billing experts at Account Matters at 508-422-0231.

PT Billing Assessment Checklist

Topics: Billing

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