What Is a Health Care Clearinghouse?

In the health care industry, medical providers must engage in billing processes to make sure that they are paid by health insurance companies and patients. With so many health care providers using their own software systems for practice management and billing, in different states with different insurance regulations, interfacing with different insurance entities, each with its own methods and processes, a large opportunity for miscommunication exists. A health care clearinghouse is an entity that helps standardize the information that is transmitted in the industry.

Health Care Clearinghouse

• A health care clearinghouse is an organization that acts as a middleman between a medical provider and the entity that ultimately needs the information. For example, when a hospital needs to get paid on an insurance claim, it must submit detailed medical information to the insurance company. When the hospital sends out this information, it goes through a health care clearinghouse so that the information can be translated into a form that the insurance company can accept and understand.

Check for Errors

• One of the major advantages of a health care clearinghouse is that it helps pre-screen the information that is submitted for errors. The software that is used for this process takes the information that is submitted by the health care provider. If an error is present, the software will find the error and alert the user. This way, the user can correct the error almost immediately instead of sending a claim into the insurance company and then waiting for it to be denied for a technical error.

Claims Processing

• In addition to helping medical providers file claims, a clearinghouse helps in the claims processing as well. Insurance companies that receive claims through a medical clearinghouse get information in a format that is easy to understand. This speeds up claims processing and makes it easier to approve or deny claims immediately. This also has the effect of increasing the number of approved claims for medical providers, because fewer paperwork errors occur.

Service

• A health care clearinghouse is a separate company that works with both medical providers and insurance companies. In exchange for the services they provide, medical clearinghouses charge a monthly fee to the companies that use them. A company might expect to have to pay as much as $125 per month for a subscription to a medical clearinghouse service. Once the subscription is purchased, the company can use the software 24 hours per day to file claims.