Make Your Clearinghouse Do The Work For You

Written by on April 1, 2014 in Practice tips - No comments

Managing your revenue plays an important role in your profitability.  Accurate documentation, coding, and timely claim filing are the main drivers in the financial health of a practice.  A lot of times, getting paid quickly is about using the right tool for the right job. In terms of documentation the tool is likely the EHR you have chosen or, if you have not implemented an EHR, how you handle your documentation on paper. For coding, the choices are between provider coding, EHR assisted coding, utilizing a professional coder, or some combination of all three. Likewise, when it comes to managing your revenue cycle, there is more than one way to skin a cat.  The way that you choose, whether it be to submit your claims directly to the individual insurance carriers, or through a clearinghouse, is up to you. Regardless of your choice, it is important that the decision you make is an informed one.

Clearinghouses help manage the claims revenue cycle.  They allow practices to transmit electronic claims to many different insurance carriers while offering a single portal for managing all of the electronic transactions.  They are quick, accurate, and all claim information is stored in one location.  The downside is they usually cost money. It is up to you to decide if the money they save you is more than the money they cost.

In addition to claim submission, many clearinghouses offer other services to assist in the revenue cycle. Bear in mind that not all clearinghouses offer the same services. Your options will range from the bare minimum (claim filing) to more options than you will likely ever need.

Clearinghouses offer many different services outside of just “claims submission”.  The numbers in parenthesis below represent the ANSI standardized electronic format for each file type. It can be confusing, but they are worth paying attention to because they have become a common part of the revenue cycle vernacular.

  • Claim Submission (837)
  • Eligibility Verification (270/271)
  • ERA – Electronic Remittance Advice (835)
  • Real Time Edits based on LCD’s
  • Rules Based Edits
  • Claim Status Reports (276)
  • Rejection Analysis
  • Data Analytics
  • Online Access
  • Printed Paper Claims
  • Patient Statement Services
  • Patient Portals for Payments
  • Tools to submit records with the claim

The most common transactions outside of claims (837) are  ERAs (835) which allows for importing of Explanation of Benefits (EOB) from carriers.

Carriers are now mandated to allow electronic Eligibility Inquiries (270/271).  The 270 transaction set is used to transmit Health Care Eligibility Benefit Inquiries from health care providers, clearinghouses and other health care adjudication processors. The 270 Transaction Set can be used to make an inquiry about the type of insurance plan, type of service performed, where the service is performed, where the inquiry is initiated and where the inquiry is sent. The 271 Transaction Set is the appropriate response mechanism for Health Care Eligibility Benefit Inquiries. Imagine the time savings of checking patient eligibility with the click of a button vs. sitting on hold for 30 minutes.

Other significant transactions, the Health Care Claim Status Inquiry (276) is used to inquire about the status of a claim after it has been sent to a payer, whether submitted on paper or electronically.  And the Health Care Claim Status Response (277) is used to respond to a request inquiry about the status of a claim after it has been sent to a payer, whether submitted on paper or electronically.

Among other things, Clearinghouses allow billing staff to check patient eligibility, view the status of claims, denial reasons, days in accounts receivable as well as allow immediate resubmission of corrected claims.

With some of the larger Practice Management Systems, there might already be integration with one or more clearinghouses.  This allows you to work the edits inside of your Practice Management system versus having to log into the clearinghouse directly.  One word of caution, if your Practice Management System has an exclusive arrangement with just one clearinghouse, you might pay more than average rates for the various services offered.

Claims are cleaner because of the interface that is in place between the Practice Management System and the Clearinghouse.  The interface reduces human error that can occur in the data entry process.  Coding and payer edits allow for detection and correction prior to being submitted to insurance carriers. Clearinghouses also have the ability to allow practices to create their own custom edits.

Reports can be generated that show comprehensive analytics regarding denial trends, financial data and the overall operational status.  Payment posting is much more expedient and accurate because EOB’s can be imported vs manually posted by hand.  Secondary and Tertiary claims are easy to file without the expense of printing to paper.

Filing directly through insurance carrier websites can significantly slow down the payment process. Practices must submit claims individually at the expense of a person hand keying all claim information. Insurance website submission doesn’t always allow practices to see where claims are in the billing process nor do they necessarily provide edits, reports or immediate resubmission of a corrected claim. There is no way to compare data or define benchmarks of the overall practice when filing claims direct to individual carriers.  Additionally, there can be confusion around having multiple sign ons, lack of tools for claim management and little to no support.  The ONLY benefit to direct filing is that it is less expensive or sometimes free (with the exception of the person being paid to hand key the claim data).

It’s smart to utilize all electronic methods available in the management of the revenue cycle.  If done properly, it should decrease your labor cost, speed up cash flow and increase collections.

By Michelle Durner, CHBME
Applied Medical Systems, Inc.

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