On Clearinghouses

Electronic medical clearinghouses are an important facet of the entire medical coding and billing process and cycle. Clearinghouses take medical claims information and screen them for accuracy before they electronically submit them to the health insurance companies they are contracted with. They function as a hub, a middle man so to speak, to streamline the process. If the clearinghouse software catches errors made in a claim they let you know instantly where the mistake was made so it can be corrected. This procedure dramatically decreases the time it takes to process a claim, often under 10 days. When you sign a contract with one of the many medical billing clearinghouses offering their services, your preferred clearinghouse should provide you with an extensive payer list to choose from and should be nationwide, not regional.

Steve Verno said: "Now, speaking of clearinghouses, as I stated, your software may allow you to send your claims file to random clearinghouses and it may restrict you to one clearinghouse of the software company's choice."

So MANY Clearinghouses! Now I Am Confused...
By Steven M. Verno, CMBS, CEMCS, CMSCS, CPM-MCS

There are also many clearinghouses out there. Some examples I've seen are ANS, Availity, Emdeon, Ingenix, Proxymed, and Zirmed. I do not endorse any of these companies. I have worked with Availity and Zirmed and liked both. When using a clearinghouse, your billing software creates an electronic file of claims you send to an insurance company. The file is sent to the clearinghouse. The clearinghouse scrubs the file for errors and distributes your claims to the insurance company that the clearinghouse contracts with to send claims to. Each clearinghouse has a list of insurance companies, also called a payor list they send claims directly to, electronically.

For example: ABC Clearinghouse lists Aetna, Blue Cross, Cigna, Humana, Medicare and Medicaid. If you need a claim to go to Aetna, you will set up your billing software to show Aetna as an electronic claim using an electronic number for Aetna supplied by the clearinghouse. For example Aetna may have number N3562 (Made Up Number). This number is called an NEIC payer number. The clearinghouse should be able to provide you with a payer list before you sign a contract with them. Your software may process electronic claims first and paper claims second.

EXAMPLE: Let's say you need a claim to go to Sunrise insurance. ABC Clearinghouse does not send claims to Sunrise. You do not set up Sunrise as an electronic insurance. You can print the claims yourself, or you can contract with the clearinghouse to print and send them for you, naturally at a cost to you. Some insurance companies may allow you to send claims directly to them via their website, but this may be reserved for doctors that are contracted with the insurance company. When doing this you need to find out how you will know whether the claims were received, because some do not provide anything to confirm this. You later find out the claims were not on file. Its always important that you verify, verify, verify everything.

Dealing with Clearinghouses

When using a clearinghouse, there will be a contract for your to review and sign. Some clearinghouses want a set up fee. Lets say ABC Clearinghouse charges a $500 set up fee per provider. You have 3 providers, your set up fee is going to be $1,500. This is before You send any claim. Some clearinghouses also charge you on a per claim basis. This can be anywhere from $2.00 to $10 per claim. It varies, so ask for all expenses ahead of time. When You contract with a clearinghouse, make sure You get a report showing the claims were received by the clearinghouse. Also ask for a report showing that the insurance company received the claim.

REMEMBER: There is nothing worse than checking the status of your claim and finding out the insurance company says it is not on file.

Clearinghouse Contracts

You also want to have your contract specify what happens when the insurance company denies receipt of the claim. I made the clearinghouse contact the insurance company or resend the claim for free. But, I wanted them to work with the insurance company. The receipt reports were helpful when I contacted the CEO of the insurance company and the regulatory authorities for a possible violation of State insurance laws. Make sure your contracts are specific, that they address your needs, that they address resolution issues, and they work for you. As always, have contracts reviewed by an attorney for your protection. -- Steve Verno, Certified Biller (My Medical Billing Community Forum)