Should You Use a Health Insurance Clearinghouse?

A health insurance clearing house is a third-party processor that receives healthcare billing data and submits it to insurers. These entities can streamline billing, and they may reduce the frequency of claims errors. This can help therapists get paid more quickly and decrease the likelihood that a claim will be rejected. 

Some clearinghouses are fully integrated into specific practice management or billing programs, enabling therapists to quickly generate treatment notes, turn them into bills, and submit them without mountains of paperwork. But like most tools that make a practice run more efficiently, using a clearinghouse can also increase costs, particularly for smaller practices. Whether or not a clearinghouse is the right choice for you depends on the size and scope of the practice, how much you stand to gain from more streamlined billing, and how extensively you rely on insurance payments. 

What Is an Insurance Clearinghouse?

Medicaid, Medicare, and private insurers receive and process millions of claims. When there are errors in those claims, it slows down billing and reimbursement. A medical billing clearinghouse acts as an intermediary that scans claims for common errors, standardizes them according to each insurer’s requirements, then submits them to the insurer. An insurance clearinghouse may: 

• Check for or even add billing codes based on treatment notes or other health record information. 
• Ensure that each procedure code is a valid code for the diagnosis submitted along with it. 
• Provide quick electronic remittance advice (ERA). An ERA is a digital explanation of benefits that may help the client or therapist assess eligibility for additional claims and understand why certain claims were rejected or accepted. 
• Integrate with billing or practice management software to track insurance records all in one place. 

Some clearinghouses offer additional support services such as:

• Readable, plain-language patient billing statements. 
• Support for insurance denial appeals and claims rejections. 

Potential Benefits of Clearinghouses

Therapists who choose clearinghouses may find that this option frees up time and mental energy to focus on other tasks, including serving more clients, attending seminars, or marketing additional services. This is doubly true for practices that heavily rely on insurance billing or that see a large volume of clients. 

Some other benefits of clearinghouses include: 

• Faster payments. A clearinghouse may streamline the payment process by preventing claim rejections. Some clearinghouses also partner with payment processing entities to further expedite payment. 
• Higher reimbursement rates. Because clearinghouses check claims for common errors, they can increase reimbursement rates. 
• Higher earnings. If you choose the right clearinghouse for your practice’s needs and scope, the increase in insurance payments may offset any additional expenses. Moreover, because you’ll spend less time on paperwork and other hassles, you may have more time to take on new clients. 
• Better client satisfaction. Clients whose claims are fully paid may stay in therapy longer and be more satisfied with the cost and value of therapy. 
• Less stress. Navigating insurance payments can be a nightmare for therapists who hate paperwork, especially when you're trying to juggle other career demands while growing your practice. Clearinghouses can give you back your time so you can focus on the work you enjoy. 

Potential Drawbacks of Clearinghouses

Like any other service your practice might invest in, clearinghouses present some potential drawbacks. Those include: 

• Juggling multiple clearinghouses. The primary purpose of a clearinghouse is to streamline billing. If a clearinghouse does not partner with all the insurers you accept, you may end up with more work, not less. 
• Cost. You need to pay to use a clearinghouse, so you’ll need to look at how this service affects your budget. In some cases, the added value offsets the cost. For struggling practices or clinicians who have more time than clients, however, the investment may not be a worthwhile one. 
• No guarantees. While clearinghouses can detect and correct many billing errors, no clearinghouse can guarantee that reimbursement rates will increase or that your bills will be error-free. 
• HIPAA compliance issues. You still have an ethical duty to protect clients’ protected health data. So while clearinghouses may promise HIPAA compliance and protect against data breaches, you must ensure you send information across a secure channel and take every other possible measure to protect client privacy. 

GoodTherapy works with therapists to navigate the many challenges of insurance claims and reimbursement. Whether you’re just starting your practice or expanding into multiple locations, we offer marketing webinars and continuing education programs to help you grow and reach more clients. Members also gain access to our popular directory, which potential clients can use to search by location, specialty, and more. Get listed today!

References: 

1. Clearinghouse: Change healthcare. (n. d.). Retrieved from https://support.therapynotes.com/article/62-clearinghouse-change-healthcare
2. How to choose the right medical claims clearinghouse for your office. (2017, November 20). Retrieved from https://www.apexedi.com/how-to-choose-the-right-medical-claims-clearinghouse-for-your-office
3. What is a clearinghouse for medical claims, and what do they do? [PDF] (n. d.). Retrieved from https://coa.org/docs/WhitePapers/Clearinghouses.pdf