What is a Healthcare Clearinghouse?

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As a mental health professional, you probably look for ways to grow and optimize your practice. If insurance claims are bogging down you and your staff, a healthcare clearinghouse may be the solution. 

What is a healthcare clearinghouse? It’s an organization that acts as the middle person between your practice and claims to insurance providers. They ensure your claims’ accuracy and stay on top of getting them processed, so you don’t have to. 

How a Healthcare Clearinghouse Works

A clearinghouse is an intermediary organization that processes insurance claims from your practice. The clearinghouse checks claims for accuracy. Then, it sends them electronically to health insurance companies. 

One of a clearinghouse’s essential functions is claims scrubbing. During this step, clearinghouses carefully check the claim for errors. They also ensure the claim’s electronic format is compatible with the insurance company’s software.

From there, the clearinghouse sends the claim to the insurance company. The insurance company tells the clearinghouse whether the claim is accepted or rejected. At this point, the clearinghouse will likely notify you.

If the claim is rejected, you can revise it and send it back. If the claim is accepted, the clearinghouse will send you the insurance company’s reimbursement. The payment may be in the form of an electronic funds transfer or a check. 

How much you pay for clearinghouse services depends on your needs. Some clearinghouses operate on a per-claim basis, charging up to $1 per claim. Others charge a monthly fee of $50 to $500. Even others charge a certain fee for a specific number of claims. They increase it depending on the number of claims made in a given month. So, you want to look for an option that best fits your needs.

Sending Secure Data

Sending sensitive medical data in the form of medical claims might sound questionable. But you can trust that a healthcare clearinghouse’s data transmission standards are HIPAA-compliant.

That’s because they use electronic data interchange (EDI), a secure format for sending data between insurance companies and healthcare institutions, to keep data secure. 

Handling of Electronic Remittance Advice (ERA)

A healthcare clearinghouse will also transmit electronic remittance advice (ERA) in the form of an explanation of benefits (EOB) to your practice. The EOB lets you see all claims adjustments in one place.

Benefits of Using a Healthcare Clearinghouse

You and your staff likely know all too well how frustrating claims and communication with insurance companies can be. Healthcare clearinghouses make the insurance claims process faster and easier, saving you time and getting you payments more quickly. 

But there are even more benefits to working with a clearinghouse than you may have realized.

Reduced Rejections and Denials

Errors happen. Clearinghouse experts help you resolve errors in your claims before those claims reach the insurance company. That means you have fewer rejections or denials of claims.

Improved Cash Flow and Staff Efficiency

Manually filing claims takes a lot of time. When you use a clearinghouse, you may be able to employ fewer staff members or use your staff’s time for other things. And because you’re paid promptly, you can get an accurate picture of your finances at any point.

Guaranteed Security

Every counselor’s office handles protected health information (PHI). Each office is also bound by the Healthcare Insurance Portability and Accountability Act (HIPAA) regulations. These regulations impact how the staff handles people’s medical information. 

Even small practices can be severely penalized for HIPAA violations. For instance, one small practice with just five doctors was fined $100,000 for failing to protect patient data.

Clearinghouses are HIPAA-compliant and can help you safeguard client information. 

Clearinghouses encrypt sensitive healthcare data. This process means they convert the data into a code that unauthorized people or organizations can’t easily access. 

A clearinghouse’s reputation depends on its ability to keep data safe. That’s why you can count on clearinghouses to have state-of-the-art data security features.

Audit Trails and Tracking Capabilities

Clearinghouses use a special security feature called an “audit trail” that creates a record of anyone who accesses medical information. The trail also tracks when they accessed the information and what they did while on the system. 

Top Healthcare Clearinghouses

Ready to make insurance claims easier? These are some top clearinghouses:

  • Availity
  • Waystar (Navicure/ZirMed)
  • TriZetto Provider Solutions
  • Office Ally
  • Alveo HealthCare Technologies

Always make sure to research any service you partner with. The right clearinghouse for you might not be right for another practice.

Tips for Selecting a Clearinghouse for Your Counseling Practice

Working with a healthcare clearinghouse has many benefits for your practice. But once you’ve decided to work with a clearinghouse, how do you choose the right one?

Assess Your Practice’s Needs

The first step toward choosing a clearinghouse is closely examining the exact services your practice needs. Reviewing your needs includes considering factors like:

  • Volume of Client Data and Claims – Processing claims is complex and takes a lot of time. Many practices find that the streamlined billing process makes a clearinghouse’s fee worth it. But if you have a small practice with only a few clients, you might not need to invest in a clearinghouse. 
  • Specific Specialties and Services Offered – Healthcare clearinghouses offer different services. Many offer automated electronic payments. Some can receive electronic remittance advice. Would these services be helpful to your practice? Consider partnering with a healthcare clearinghouse that provides them.
  • Integration Requirements with Practice Management Systems – Most healthcare providers choose clearinghouses that integrate with their practice management software, which can reduce errors and simplify data analysis.

Compare Clearinghouse Options

Once you’ve found a few clearinghouses that meet your practice’s needs, you’ll want to compare them to see which is the best fit for your practice.

When comparing clearinghouses, consider:

  • Cost and Pricing Models – Finding a quality clearinghouse is important, but so is your return on investment. Make sure a clearinghouse’s fee schedule works for your practice.
  • Data Security and Privacy – A quality clearinghouse will go beyond industry standards to ensure the best data security for you and your clients.
  • Customer Support and Training – Switching to a healthcare clearinghouse can come with a learning curve. Choosing a company with helpful customer support is essential, especially if you’ve never worked with a clearinghouse.
  • Ease of Integration and User Interface – You shouldn’t have to be a tech expert to integrate and navigate your clearinghouse software. Before committing, consider whether the option is easy to use.

Read User Reviews and Seek Recommendations

Regardless of what you’re buying, user reviews can help you make a good decision. Healthcare clearinghouses are no exception. Learn about the experiences other practitioners have had with a given clearinghouse.

Checking reviews is a fast, low-effort way to get a general sense of a clearinghouse’s quality. Of course, people may have different opinions. But if you see the same issues mentioned repeatedly in negative reviews, you should pay attention.

Online reviews can help, but there’s nothing like getting advice from someone you trust. If you have peers or colleagues who use a healthcare clearinghouse, ask for their opinions. They might even be able to show you the user interface or demonstrate important features.

You want to make sure you fully understand each clearinghouse you are evaluating. If you get in touch with clearinghouse representatives, ask them to give you a rundown of key features.

What is a Healthcare Clearinghouse? Common Misconceptions 

Many medical practices use healthcare clearinghouses, but not all practitioners fully understand them. Here are some misconceptions you may have run into.

Clearinghouses vs. Billing Services: Clarifying the Difference

Both clearinghouses and billing services review and submit insurance claims. But clearinghouses work only with insurance claims, whereas billing services handle the entire billing process.

Data Security and HIPAA Compliance Fears

Some people seem to think the process of electronically sending healthcare data isn’t secure. But clearinghouses compete with one another to offer superior data security.

Clearinghouses are also covered entities under HIPAA. The law states that they must abide by HIPAA regulations.

Debunking Cost and Affordability Concerns

If you have a small practice, you might think healthcare clearinghouses are too expensive. But, at $50-$500 a month, there’s a clearinghouse for nearly any budget, and most clearinghouses will save your practice time and money in the long run.

Potential Challenges and Risks of Using a Clearinghouse

Clearinghouses have plenty of benefits, but they aren’t without downsides. Here’s how to keep challenges and risks to a minimum.

Your practice might have specific risks to prepare for. But all practices should consider these three potential problems:

  1. Downtime and Service Disruptions – Even the best software programs can have unexpected downtime. How will you handle claims if the clearinghouse is down? Make sure you have a detailed plan in place.
  2. Data Errors and Reconciliation – If you store patient data in another system, you might find discrepancies between that system and the clearinghouse. Make sure you have a strategy for finding and reconciling those differences.
  3. Compliance Audits and Preparing for Assessments – If you choose to use a clearinghouse, you might need to comply with other regulations. It’s important to make sure you fully understand those regulations. If an assessment finds that you aren’t compliant, you may face fines and other penalties.

Best Practices for Maximizing Clearinghouse Benefits

Using a clearinghouse might sound effortless, and it often is. But you want to get the most out of this software. You can do this by following best practices.

Optimize the Claims Submission and Reimbursement Processes

Clearinghouses flag errors and notify you if a claim is rejected. For optimal efficiency, make sure you have a system for addressing those issues. For example, you might ask your office manager to watch for notifications during business hours.

Regularly Reviewing Reports and Analytics

Clearinghouses give you access to a wealth of data-driven insights. Make sure you use them! You might set a specific time (for example, the beginning of each month) to look closely at reports.

Stay Updated on Industry Changes and Technology Upgrades

Technology constantly evolves. You rely on technology to grow your practice, so make sure you keep up with new advancements. Similarly, you’ll want to keep track of regulatory changes to ensure your practice stays compliant.

Is a Healthcare Clearinghouse Right for You?

As a counselor, you want to do right by your patients. And often, working with a healthcare clearinghouse helps you do just that.

Of course, every practice is different, so you want to make sure you understand the risks and benefits of working with a clearinghouse and choose one that’s best suited for your practice.

Looking for other efficient ways to manage and grow your practice? All Counseling can help! Claim your profile in our therapist directory today and become part of the All Counseling community.

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