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Medical Claims Clearinghouses: A Guide

There are several important things to consider concerning using a claims clearinghouse for your practice. Here are some examples of what you need to know to make sure that you are armed with the right data to make good decisions.

The Importance of Having the Right Medical Claims Clearinghouse

Your office can benefit significantly from having effective claims clearinghouse these days. Here are a few reasons why this is the case.

The Age of Digitization

While it’s still common for offices to send paper bills for their services, the actual healthcare claims themselves are processing everything digitally more and more. A huge number of companies that pay insurance claims use electronic clearinghouses. This is because these clearinghouses are considered more effective for checking mistakes. It is also often because the clearinghouses can send the data more securely and effectively then what you get with paper.

Decreased Error Reduction

The traditional way insurance paperwork was done previously is highly inefficient. The company had to check for any errors you sent, then send it back to you so that you could fix it. Only after the mistakes were eliminated could they send you payment and show you how much the patient owes so you could then bill them.

The waste of effort and time here was significant. A clearinghouse allows for a better way. They will check for data that is lacking or incorrect from the patient like their name or birthday, as well as incorrect insurance provider info, billing codes, contact info, and so on.

Increased Efficiency and ROI

As a result of all this, using a clearinghouse that utilizes electronic methods means that you get paid more quickly. This speed will help you move more quickly, making you more effective at edging out your competition.

The efficiency also comes from staff knowing immediately about errors, reducing the need to re-enter data, sending claims all at once, reducing the change for data loss in a catastrophe, and even having money on endless letters and stamps.

All of this means more profit for you since you’ll be cutting back on inefficiencies that are costing you.

Finding the Best Clearinghouse for Your Specific Office

Every office is going to be different, and it follows that different clearinghouses are going to be more effective for that office as a result. Here is a guide for how you can make a good choice.

Review the Procedures for a Medical Clearinghouse

  1. First, your office gets software that can handle medical claims. Then, it uploads the claim to the clearinghouse securely to comply with HIPAA. It’s then checked for errors.

  2. The payer then either rejects or accepts the claim. You get an update immediately from the clearinghouse.

  3. Your team can then make changes if needed, then send the claim back. Once it’s verified as correct, you receive the payment electronically.

The advantage in a clearinghouse is that errors are checked for both by them and you. The back and forth instantly mean that the waiting time drops to just a few minutes where it would often be days otherwise. Doing it by paper has a 28 percent fail rate, just for comparison.

Consider Your Options and Choose

Once you have an eye for how a clearinghouse can help, you can take a look at what different options you have and then evaluate them for effectiveness.

There are a lot of ways to choose. You can choose based on how national they are, what insurances they have, post-claim support, payment scheduling, level of rejection analysis for claims, and many other rubrics based on what you need the most.

It’s going to be wise to check to see how effective their customer support is as well as how long they tend to take to respond to claims.

Plus, you’ll want to find out from the clearinghouse itself, or through other reviews or means, exactly how long it takes for them to provide 835s so you don’t end up with delays.

Check out the software and see if it works for your office as well before you choose.

Is It Ultimately Worth Using a Claims Management Clearinghouse?

This is a question you will have to ask yourself, ultimately. However, there are reasons why so many offices use a claims clearinghouse these days.

Solve Disputes

One of the reasons claims companies are used so much is that a clearinghouse can go after a financial institution on behalf of an office to recover unpaid claims or other potential problems that a client has with the financial organization.

This can be a great advantage because it leads to faster payment than what would happen otherwise. The claims company will do everything for you without the need for you to worry about it yourself since you likely have enough to worry about.

The companies can find the best possible payout you could get as a result of the dispute. Clearinghouse companies are experts in these sorts of claims and know how to negotiate with financial institutions since financial groups are worried about their liabilities. As a result, an effective clearinghouse company knows how to speak the language of financial institutions in order to facilitate faster and more favorable outcomes from these institutions to make sure you are treated fairly and there are no unnecessary frustrations involved in these kinds of transactions.

Medical Claims Clearinghouses: Expertise

An important thing to note about healthcare is that it is constantly changing. This includes the regulations that govern this sector. Medical doctors and healthcare workers have a constantly shifting number of rules that govern what they can and can’t do.

This is exactly why it’s important to have a company on your side that will watch your back. An example of this is the Affordable Care Act that was passed in 2020. Regulations shifted considerably as a result of this act as did the state of healthcare in the country.

Many of these changes were straightforward from reading the law. For example, since the law required that many more people get insurance of some kind, there was a huge influx of new people seeking insurance.

Keeping Up with Subtle Changes

In addition to obvious shifts from the ACA, some were a lot more subtle.

Due to all of these complexities, a clearinghouse can be invaluable for adding their expertise to aiding a provider with their electronic explanation of benefits, also called EOBs, as well as verifying benefits and eligibility.

The ACA changed a few times such as in 2012 and again later on when the mandate was dropped from the ACA. It’s likely that more changes will be coming down the pike as well, and having an expert on your side when these changes happen is important.

The 2012 change, for example, required that electronic data be transmitted in the ANSI 5010 format. This was a change from the ANSI 4010 format. It’s easy to miss these kinds of changes as a medical provider given how focused you often are on your profession.

A clearinghouse is essential for making sure that all of these subtle shifts are taken into account during regular operations.

Claims Clearinghouses and The Problem of Rejected Claims

According to the AARP, it’s estimated that about 14% of submitted medical claims are rejected. This means that out of 7 claims, one of them is rejected. Considering just how many claims there are daily, this means there are more than 200 million of them that are rejected. Understanding why claims are rejected is important because many should be legitimate but insurance companies are rejecting many that they shouldn’t. Here are some valid reasons for rejections followed by how medical claims clearinghouses can help.

Pre-authorization Rejections

Some claims are rejected because the provider failed to get authorization from the insurance company ahead of time. Examples of this include examination procedures like MRIs or CT scans.

Out-of-Network Provider Rejections

Other rejections happen because the insurance company only covers specific clinics and hospitals within their specific network. If a patient goes out of network than a rejected claim could happen. This is why it’s important to double-check that a patient is correct about their insurance and what it covers.

Processing and Billing Errors

Estimates for how many medical bills have some kind of errors are as high as 80% These include entering something twice, getting insurance numbers wrong, and so on, can cause a lot of rejections. They can also cost money.

Non-covered Procedures

Many patients can have a less than perfect understanding concerning what their insurance covers and what it doesn’t. If they incurred charges for a procedure you performed that isn’t covered, this can also cause their claim to be thrown out. Again, this needs to be carefully checked to prevent problems in case the patient has a misunderstanding.

A clearinghouse can straight up prevent these rejections from happening in the first place with the right software and oversight. Others can often be negotiated or even corrected if an insurance company happens to be in the wrong.

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