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What Does a Clearinghouse Do During Claims Submission?

PUBLISHED ON: 07.08.2024
Health care medical insurance life

Short Answer: A clearinghouse acts as an intermediary between healthcare providers and insurance payers, ensuring that claims are accurately formatted, error-free, and compliant with payer requirements before submission. This process helps streamline claims processing, reduce denials, and expedite reimbursements.

What is a Clearinghouse?

If you’ve ever wondered how medical bills get processed and paid, the clearinghouse plays a key role in this process.

Think of a clearinghouse as a middleman between healthcare providers (like mental health providers or hospitals) and insurance companies. Its main job is to make sure that the claims (bills) sent by healthcare providers are accurate and formatted correctly before they reach the insurance companies. This helps to speed up the payment process and reduce errors.

claims submission concept

Essentially, the clearinghouse serves as a central hub where claims are received, checked for errors, and then forwarded to the appropriate insurance companies.

The Role of a Medical Billing Clearinghouse in Claim Submission

1. Claim Submission

When a healthcare provider submits a claim, it first goes to the clearinghouse. This can be done through electronic file submission, which is much faster and more efficient than paper claims. The clearinghouse checks the claim for any errors, such as invalid diagnosis codes or missing or invalid information, and ensures it meets the standard format required by the insurance payer.

2. Eligibility Verification

Before a claim is even submitted, the clearinghouse can verify the patient’s eligibility for the services provided. This step is crucial as it helps avoid claim denials due to inaccuracy, saving time and improving cash flow for the provider.

3. Claim Scrubbing

The clearinghouse uses advanced tools, sometimes powered by artificial intelligence, to “scrub” the claim. This means it checks for errors or inconsistencies that could lead to a denial. If any issues are found, the claim is noted for the provider to make any necessary adjustments

4. Claim Submission to Payers

O, If the claim is accepted, its then forwarded to the appropriate insurance payer. This could be a primary claim to the main insurance company or a secondary claim if there are multiple payers involved.

5. Claim Status Inquiry

Providers can use the clearinghouse to check the status of their claims. This is often done through a provider portal where they can get real-time updates on their claims.

6. Remittance Advice and Payment

After the insurance payer processes the claim, they send back a remittance advice, which details what has been paid and any adjustments made. The clearinghouse forwards this information to the provider. In most cases, electronic remittance advice (ERA) are used, which speeds up the process. Providers can also receive payments through electronic funds transfer (EFT), posting it electronically into the EHR software, ensuring quicker reconciliation

7. Additional Services

Clearinghouses often provide additional services such as eligibility information, comprehensive claims recovery reports, and support for timely filing deadlines and denials. They also help with payment recovery details and provide detailed information on the claims process.

The Claims Submission Journey Simplified

claims submission journey infographic

Let’s simplify the journey of a medical claim from the doctor’s office to the insurance company, and see where the clearinghouse fits in.

  • Claim Creation: After you visit your doctor, the healthcare provider creates a claim.
  • Sending to the Clearinghouse: Instead of sending this claim directly to the insurance company, the healthcare provider sends it to a clearinghouse.
  • Claim Scrubbing: The clearinghouse reviews the claim for any errors or missing information. The clearinghouse checks for things like invalid codes, missing patient information, or formatting issues.
  • Error Correction: If the clearinghouse finds any errors, it notifies the healthcare provider to fix.
  • Claim Submission: If there are no errors, the clearinghouse forwards it to the appropriate insurance company.
  • Acknowledgment and Tracking: The clearinghouse also tracks the claim and provides acknowledgments. This means they keep an eye on the claim’s status and let the healthcare provider know if it has been received, accepted, or rejected by the insurance company.

Why Use a Clearinghouse?

You might be wondering, “Why not just send the claim directly to the insurance company?” Here are a few reasons why using a clearinghouse is beneficial:

  • Error Reduction: By catching errors early, clearinghouses help reduce the number of rejected claims. This means faster payments and less hassle for healthcare providers.
  • Efficiency: Clearinghouses streamline the claims submission process, making it quicker and more efficient. This is especially important for busy healthcare practices.
  • Compliance: They ensure that claims meet the specific requirements of different insurance companies, which can vary widely. This helps in maintaining compliance with industry standards.

Special Considerations for Mental Health Providers

Mental health billing can be particularly complex due to the variety of services and treatments provided. Here are some specific benefits of using a clearinghouse for mental health claims:

  • Specialized Knowledge: Clearinghouses that specialize in mental health billing understand the unique codes and requirements for mental health services, reducing the likelihood of errors.
  • Integration with EHR: Many clearinghouses integrate directly with Electronic Health Records (EHR) systems used by mental health providers, making the process even more seamless.
  • Support for Complex Cases: Mental health cases often involve multiple sessions and treatments. Clearinghouses can help manage these complex billing scenarios more effectively.

Getting Started with a Clearinghouse

To start using a clearinghouse, providers typically need to go through a registration process. This might include providing banking information for new enrollments for electronic payments. Providers will need to provide company specific information and other details during this process.

How PIMSY EHR Can Help

Integrating a clearinghouse with PIMSY EHR can simplify the claims process for healthcare providers.

PIMSY is an EHR software solution that provides simplified administration processes for mental health providers and their practice. 

By leveraging high levels of integration, PIMSY allows seamless communication between our EHR system and several highly-rated Clearinghouses.  This integration ensures that claims are accurately formatted and error-free before submission, reducing the likelihood of denials and speeding up the reimbursement process.

Additionally, providers can easily create claims through the system, which are then transmitted to the clearinghouse for validation and submission to insurance payers.

This approach not only simplifies the administrative burden on healthcare providers but also ensures timely and accurate reimbursement, allowing you to focus more on patient care.

Reach out today to see how we can make clearinghouse submissions work for you! 



Jayne Kay
Author: Jayne Kay

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