The Role of a Clearinghouse During the Claims Submission Process

The claims process can be complicated. It is a process that starts as soon as a patient walks through the door and doesn’t end until a healthcare provider is paid for services rendered. A medical claims clearinghouse can help healthcare providers and billing companies submit insurance claims accurately and quickly to ensure faster payment. That’s why understanding what a clearinghouse does during the claims submission process is essential for healthcare providers and their staff. 

Let’s explore the role of a medical clearinghouse in the claims submission process and why every healthcare provider should use one to submit and follow up on their claims.

What is a Clearinghouse?

A clearinghouse helps healthcare providers, such as doctors and clinics, process insurance claims efficiently. It acts as an intermediary between healthcare providers and insurance companies (or payers), providing the tools to ensure claims meet industry standards and payer specific requirements before they are submitted to the payer for payment.

Additionally, a clearinghouse is an aggregator of payers. While you can visit each insurance company’s website and upload the claims for that respective payer, if you are submitting claims to more than one payer, this process can quickly become tedious and unmanageable. A clearinghouse lets you submit to all payers in one location.

What Does a Clearinghouse Do at Each Stage of the Claims Process?

A clearinghouse plays a crucial role at each stage in the claim submission process, ensuring that claims are correctly submitted to insurance companies. Medical claims submitted through a clearinghouse typically have reduced claims rejections and faster reimbursements.

Claims Submission

In instances where providers are unable to generate an electronic claim, some clearinghouses allow healthcare providers the ability to manually enter their claims directly on their website. However, more often they upload files exported by their practice management or EHR software. The clearinghouse then scrubs and validates all the submitted claims for further processing.

Claims Receipt & Standardization

Different insurance companies have different requirements with regards to billing certain services, but typically they are formatted with what is called an X12 837 (or more commonly know as X12). Once the clearinghouse receives a claim, it verifies that it is in this format so that the insurance company can easily process it. In some cases a payer will not accept electronic claim submissions. In these cases, the clearinghouses should be able to convert the claim to a paper format that will be sent physically to the payer.

This standardization ensures that all claims are presented in a way that meets the insurers' guidelines and reduces the risk of rejections due to formatting issues.

Claims Validation & Scrubbing 

Once claims are submitted to the clearinghouse, the clearinghouse will validate that the claim is HIPAA compliant and meets industry standards. After validation, claims are then scrubbed for missing patient information or data elements that may cause rejections. For example, a missing payer ID or NPI missing digits or having a birthdate in the wrong format will result in a rejection. These items will be flagged and sent back to the provider, allowing them to correct these errors before the claim is sent to the payer. This step helps catch many errors early, preventing delays later. The clearinghouse also ensures that all required fields are filled out and that the basic information is correct.

Claim Transmission

Once the claims pass validation and are error-free, the clearinghouse sends them to the insurance companies. As mentioned before, one major advantage of having a clearinghouse is that it aggregates all payers into a single platform. Rather than going to each individual payer’s website to submit these claims, you can submit your claims to any insurance payer through a clearinghouse, including Medicare and Medicaid. The goal is to get the claims to the payers fast so payments can be made sooner. A clearinghouse can help minimize the time required of your staff, avoid delays, and reduce the chance of claims getting lost.

Payer Responses

After the claims are sent, the clearinghouse will receive a variety of responses from a payer; below is a list of the most common responses:

• 999 Acknowledgement
  Confirm the receipt of the claim and whether it has passed initial syntactical and format validations.
• 277CA (Claim Acknowledgement)
  Provides a detailed acknowledgment of each claim, indicating whether it was accepted or rejected for further processing. It includes information about any errors or issues that need to be addressed.
• 276/277 Transactions
  If the healthcare provider wishes to get the status of a pending claim, they can send a 276 transaction (if supported by the payer). The payer will then respond with a 277, which will provide the claim's status, such as whether it is pending, approved, denied, or requires additional information.
• 835 Electronic Remittance Advice (ERA)
  The ERA details the payment and any adjustments made to the claims. It includes information about which claims were paid, denied, or adjusted and the reasons for denials or adjustments. The 835 report also contains payment information, such as the amount paid and the payment date. 

The clearinghouse sends these responses back to the provider. This keeps them informed about the status of their claims and lets them know if any issues need to be fixed.

Reporting on Claims Status

A clearinghouse provides detailed reports on the status of claims. Doctors and clinics can use an online portal to track their claims in real time. This portal offers tools to monitor claim submissions and identify problems. These reports include information on the number of claims submitted, the status of each claim, and any errors found. This data helps providers improve their billing processes and ensure claims are processed correctly.

Why is Using a Clearinghouse Important for Healthcare Providers?

Using a clearinghouse is very important for healthcare providers because it increases efficiency and reduces the number of rejected claims. Here are some key benefits of using a clearinghouse:

1. Reduces Errors: A clearinghouse helps identify claim errors and offers tools to providers to fix these claim errors before they are sent to insurance companies. Doing so reduces the chances of claims being rejected or denied, so doctors and clinics get paid faster.
2. Saves Time: A clearinghouse saves time for medical staff by handling the complex task of checking and submitting claims. Using an aggregate payer portal allows them to focus more on caring for patients rather than going to each payer’s website to submit each claim.
3. Improves Cash Flow: Fewer claim rejections and quicker payments help improve the cash flow for medical practices. This financial stability is crucial for keeping a healthcare business running smoothly.
4. Stays Ahead of Rules Changes: Insurance rules and regulations change often. A clearinghouse can help you stay up-to-date with these changes, ensuring all claims follow the latest standards.
5. Provides Useful Reports: Clearinghouses offer reports on claims. These reports help practices understand their billing processes better and find ways to improve.

Explore Service Center, Office Ally’s All-Payer Clearinghouse Solution

Service Center, a web portal to Office Ally’s all-payer clearinghouse, offers a complete solution to help you manage medical claims efficiently. Here’s how it helps:

1. Wide Payer Access: Office Ally’s clearinghouse lets you send claims to any payer with its extensive payer list. It’s easy to send claims to many different insurance companies.
2. Real-Time Eligibility Checks: Providers can check if a patient’s insurance is active in real time. This step reduces the risk of rejected claims because the patient’s coverage was invalid.
3. Claim Status Reporting: The clearinghouse provides claims reports, helping providers track their claims and find any issues quickly. These reports also help improve billing processes.
4. Easy-to-Use Dashboard: The centralized dashboard offers a clear overview of claim activity, making it easier for providers to manage their claims.
5. 24/7 Access: Office Ally’s clearinghouse is cloud-based. Providers can access it anytime, supporting remote work and maximizing productivity.
6. Support and Training: Office Ally offers support and training to help healthcare providers use the clearinghouse effectively.

Using Service Center helps providers handle claim rejections, reduce errors, and ensure that all medical claims managed by the Office Ally clearinghouse are processed smoothly and efficiently.

By using these solutions, healthcare providers can enhance their billing processes, leading to better financial outcomes and more time to focus on patient care.

*Transactional fees may apply. See the Data Sheet for details.