Medical Billing Cycle - Healthcare

Clearing House in Medical Billing

Clearing house in medical billing is an entity, which is used to transmit healthcare claims electronically to the insurance companies for adjudication. It means clearing house in medical billing acts as an Electronic Data Interchange (EDI) between healthcare provider and payers.

How Clearing House works in medical billing?

Clearing house in medical billing process starts once the claim generated (which is ready to submit the claims electronically) from healthcare providers in medical billing. These filled claims will be sent to the transmission department from the healthcare providers.

Clearing house checks (Scrub) the claims for errors. If they come across the claim with any error, then those claims will be dropped and the claims without errors (called as clean Claim) are converted to Insurance specific format and then it will be forwarded to the Insurance Companies for adjudication. The clearinghouse will then send back a scrubber report, which consists of the following details:              

  • Total number of claims received
  • Total number of clean claims
  • Total number of dropped claims and reasons for dropping the claims (These dropped claims should be fixed as per the reason and then resend them electronically).

Claims are successfully transmitted through clearing house to carriers by following each carrier’s instructions and policy.

Clearing house submits the claims directly to the insurance company for adjudication and each healthcare provider chooses which clearing house they want to use for submitting the claims. Some of the Clearing houses are listed below:

  • Availity
  • Zirmed
  • Gateway
  • Emdeon
  • Office Ally
What are the advantages of clearing house in medical billing to submit claims to insurance companies?
  • Time saving and Fast Payment (Reimbursement time reduced). Single source of handling claim submissions and status – We can submit all the claims in batch all at once, rather than submitting the claim separately to the individual carrier. Also we can download ERA.
  • Error Scrubbing and Accuracy – Every claim is checked as per the insurances specific rules and let you know in real time (Likely verify patient and policy identification, data missing, ensure accurate coding).
  • Automation and Integration – Each payer and providers are likely to use different software’s and these software’s are not compatible with each other. Clearing house integrates between provider and insurance companies.
  • Saving administrative costs (Eliminate of paper forms and envelopes).
What is the role of Payer ID in clearing house in medical billing?

The Payer ID is a unique identification number assigned to each payer for the purpose of routing the claims electronically. Each payer has unique payer ID usually 5 digits in number, but it may be longer.

What are the stuffs one has to look in selecting clearing house for submitting claims in medical billing?

Here are some of the important stuffs we need to look in choosing clearing house:

  • Verification of Eligibility: Some clearing house offers eligibility verification of patient. By this we can get rid of rejections or denials related to eligibility.
  • Status reports of Claims.
  • Rejections of Claims with explanation.
  • Update of payments and adjustments.
  • Online access, real time support and affordability.