What Does a Clearinghouse Do During Claims Submission?

Introduction:

The knowledge about the clearinghouse and what the clearinghouse does during claims submission is relevant when speaking about healthcare billing. It is also essential for the medical staff and suppliers. It may take many forms, which include the steps involved in preparing claims, writing and submitting claims, revising and resubmitting claims till claims are correct, as well as meeting regulatory requirements and gaining approval from the insurers. This is where a clearinghouse comes into the picture.

During the upcoming blog post, we will explain what the clearinghouse does during the claims submission process and why it is an essential step within the general understanding of revenue cycle management in healthcare. We will also explain its functions and how it helps suppliers and insurance payers overcome obstacles in the entire procedure.

1. Data validation and Error Checking Process

Data validation and Error Checking Process
Data Validation and Error Checking Process

The process of data validation is one of the critical functions that a clearinghouse is supposed to fulfill in connection with claim submission. Healthcare provider claims are usually electronic, and before the actual claims are forwarded to insurance payers, they have to be taken through the clearinghouse to check complete account data. This includes:

  • Patient demographics: First name, last name, place of birth, insurance information, etc.
  • Provider information: These include the credentials of the practitioner, the National Provider Identifier, and other pertinent information.
  • CPT and ICD codes: The coding accuracy for procedures and diagnosis.
    An essential check about what clearinghouses do during claims submission is to confirm that there are no left-out fields in the claim or wrong code entries. If there are any errors, the claims are rejected and sent back to the provider for correction with the intention of not having the claim denied. This is a typical error-checking feature that forms part of what a clearinghouse is supposed to do when it comes to submitting claims.

2. Claims Formatting

An additional aspect of what clearinghouses do during claim submission is coding the claims in the format required by various insurance providers. Every insurance payer could have peculiarities regarding how it is ready to receive the claims. Often, a clearinghouse interprets a claim per the provider’s EHR system and encodes it according to the payer’s demanded format.
For example, a clearinghouse can help translate claims into ANSI 837 format since it is the acceptable format for electronic healthcare claims to the insurance company. By this, the clearinghouse ensures that the submitted claims are straightforward and compliant with the payer systems. This is a core function of what a clearinghouse does when submitting a claim, as incompatible formats often result in claim rejections, among other issues like delayed payments.

3. Claims Scrubbing

This process is another functional differentiating feature, where the work of the clearinghouse searches for any problem with the claim before submitting it to the payer. Auditing includes reviewing for coding mistakes, wrong input data, or any flaw that may contribute to a claim rejection or delay.
Thus, the clearinghouse depends on predetermined rules and algorithms to substantiate the claim. For instance, if there is an improper CPT, diagnosis, or procedure code, the clearinghouse will generate a message to alert the provider that there is a problem, and the whole transaction is sent back to the provider for corrections.
This has become an advantage in cutting down the rate of denial and rejection, allowing the claim to stand a higher probability of being approved from the first instance. Another is what a clearinghouse performs when submitting claims that aid providers’ reimbursement process.

4. Claim Tracking and Reporting

Claim Tracking and Reporting
Claim Tracking and Reporting

Once the claim has been authenticated, standardized, and purged, it is transmitted electronically to the payer. However, that is not all about the clearinghouse; it also has other responsibilities in the market. It also can track and report claims. Through the clearinghouse, healthcare providers can track the status of their claims electronically using the system, from when the claims are submitted to when they are approved or denied.
This visibility makes it easier for the providers to handle the revenue cycle as they can follow where claims are in the cycle and intervene if necessary. For instance, the clearinghouse will inform the provider that the insurance payer has rejected a claim so the provider can work on it instantly.
Other essential components of what a clearinghouse does during claim submission include claim tracking and detailed reporting, which provide light into the submission process. It identifies the payment patterns and helps providers learn how to enhance and modify the submission for claims efficiency over time.

5. Submission to Multiple Payers

In health care systems, the health care provider serves several insurance companies. Fitting claims to each payer on their account would be very time-consuming and may lead to many errors. Another crucial role of the clearinghouse is simultaneously sending claims to different payment makers.
Once the electronic claims have been formatted and cleaned, more attention is accorded to dispatching the claims to the correct payer, depending on the invoice details submitted. This not only makes the process faster but also cuts much of the load from the billing department of the healthcare provider.
This multi-payer submission feature is a critical component of the best clearinghouse for medical billing because it helps save time and get claims to the right insurance companies.

Conclusion

It is essential for any provider who seeks to enhance the billing process and increase the rate of claim payments to understand what clearinghouses do during claims submission. In terms of data validation, error checking, claims formatting, and tracking, to name but a few, the clearinghouse helps meet this crucial objective.

Decision makers benefit from the following to improve their revenue cycle management and ensure that providers receive timely reimbursements: The best clearinghouse for medical billing defines the ability to be financially stable in the constantly evolving medical billing environment.