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What does a Clearinghouse do During Claims Submission

The clearinghouses for the healthcare industry act as an intermediary service to bridge the gaps between healthcare service providers and insurance companies. To fully understand what does a clearinghouse do during claims submission process – we must first understand its role, particularly inside medical billing services. The clearinghouses moderate and manage the transactions between insurance payers and healthcare providers for medical billing. Clearinghouses also facilitate smooth communication – targeting to get faster reimbursements and reducing administrative costs and delays.

What does a clearinghouse do during claims submission process?

The healthcare clearinghouses simplify the billing processes by reviewing for errors – before the claims reach insurance payers. A clearinghouse can help:

  • Streamline operations
  • Reduce administrative burden and costs
  • Minimize claims rejection due to errors

Clearinghouses also convert claim data into standardized formats, ensuring compatibility with payer systems. Furthermore, clearinghouses also help achieve better accuracy and efficiency, making them essential to healthcare revenue cycle management.

Processes of Medical Clearinghouses

The healthcare clearinghouse performs an important process during the claim submission, known as claim scrubbing. This means that a clearinghouse checks all insurance claims from a provider for errors and ensures that only clean claims reach the payers.
Clearinghouse also ensures and preserves the anatomy of a clean claim – by checking if a claim’s diagnostic and procedural codes are appropriate and valid. All of this collectively helps prevent processing errors.
Furthermore, the clearinghouses also convert and process claims into standardized formats, making them ready for payers. A standard format is essential as it aligns with EDI (Electronic Data Interchange) standards. Following the EDI standards ensures simplified electronic communication between different systems

Key Features of Clearinghouse for Efficient Claim Submissions

It is essential to understand what does a clearinghouse do during claims submission utilizing its key features. Let’s explore what exactly takes place and why the clearinghouse processes are necessary for accurate medical billing and reimbursements.

Data Validation

One of the vital roles a clearinghouse plays during claims submission is data validation. This key function ensures thorough analysis of the medical claims, checking their completeness and accuracy while removing errors. With this essential step, healthcare providers can avoid unchecked claims, which are susceptible to issues like missing information or incorrect codes. These errors often lead to claim denials and processing delays. To prevent these, the clearinghouse’s thorough data validation streamlines the claims process for healthcare professionals.

Claim Scrubbing

Claim scrubbing guarantees accurate data entry within electronic claims. This advanced data validation process conducts thorough quality control checks by running practice claims through predefined edits and validations. The outcome: “clean claims” with a significantly higher likelihood of smooth processing. This process is integral for healthcare professionals, doctors, and administrative staff seeking efficient claims submission.

Format Standardization

Handling claims across various insurances can be complex as each company has a unique set of requirements. Consistently revisiting pages of insurance guidelines is time-consuming. Clearinghouses ease this burden by offering format standardization services. This step ensures your claim information follows the payer’s specific format and coding prerequisites. Coding compliance with industry standards like ICD-10 (International Classification of Diseases) and CPT (Current Procedural Terminology) codes is essential. Accurate coding translation reduces the likelihood of claim rejections. This service is necessary for healthcare professionals managing multiple insurances. The claims submission process becomes efficient and error-free with format standardization, benefiting the entire medical practice.

Error Identification and Correction

When errors are found in your claim, trust that your clearinghouse will send you a detailed report identifying the issues delaying successful processing. Upon reviewing this report, providers can rectify any errors, ensuring a smooth claim resubmission.
Common errors include:

  • Incomplete patient information
  • Wrong codes
  • Incomplete documentation
  • Changes in payer requirements
  • Prior authorizations
  • Manual processes and different systems

Clearinghouses help identify and resolve these issues pre-submission, enhancing the likelihood of successful claim processing. This step is invaluable for healthcare professionals as it helps prevent claim rejections and delays, ensuring a smoother claims submission process.

Electronic Transmission

Following validation, formatting checks, and claim scrubbing, your claims head to the payer. Clearinghouses employ electronic transmission services to send this data to insurance companies securely. Due to PHI on medical billing claims, a secure network ensures HIPAA compliance during this electronic transmission. Opting for electronic transmission accelerates the process, providing healthcare providers with a quicker turnaround than paper-based submissions. The benefit here lies in expediting information delivery to the payer, translating into faster reimbursement for healthcare staff.

Receipt Confirmation and Reconciliation

Upon submitting your claims, the clearinghouse tracks and secures confirmations from payers. Conversely, on-time notifications help with timely denied claims management if issues arise.
It is essential to recognize that clearinghouses not only track data from prior claim rejections but also rectify known errors for future submissions. This strategic approach minimizes recurring mistakes, optimizing time management. Moreover, several clearinghouses extend services to follow up with payers regarding overdue claims, particularly for prolonged waiting periods. This service is invaluable for busy healthcare facilities, aiding in claim oversight and ensuring accurate reimbursement.

So, what does a clearinghouse do during claims submission?

By offering comprehensive support in receipt confirmation and reconciliation, clearinghouses significantly contribute to the streamlined efficiency of the claims processing workflow for healthcare professionals, doctors, and administrative staff.

Reporting and Analytics

Investing in a reputable clearinghouse service brings the advantage of comprehensive reporting and analytics. Access to detailed insights into your claim submission process, denial and acceptance rates, and payment statuses can transform the medical billing process for your healthcare practice.

Healthcare workers can leverage these numbers not only to track revenue but also for:

  • Categorizing and analyzing data trends
  • Optimizing the billing processes
  • Enhancing overall revenue cycle management
  • Ensuring compliance monitoring
  • Securing data backups

Effective data reporting empowers providers to stay active. By closely monitoring a claim’s progress, healthcare professionals can swiftly address any emerging issues, ensuring a seamless and efficient claims submission process.


In conclusion to the question, what does a clearinghouse do during claims submission? We determine that simplifying the claims submission process is the primary goal of every healthcare practice. Who doesn’t want a decrease in the claim denial rates? The healthcare clearinghouses help achieve that, ensuring that the claims submission process is compliant, accurate, and efficient. The clearinghouses also reduce your team’s administrative burden, leading to higher morale and low turnover rates. Investing in clearinghouse services means your practice is ready for the next step. Clearinghouse improves your overall RCM and also enhances the procedural efficiency of your practice.

Frequently Asked Questions

The most common reason for denied claims is incorrect information. Be it by accident or intentionally, coding and billing errors are the most common reasons for claims denials due to incomplete, missing, or incorrect information.

Your billers can forward an appeal letter to the insurance provider stating why you believe the claim denial is wrong, thus, requesting the insurance company to reverse the denial.

It is a strategic process that aims to resolve and unmask problems that lead to claim denials.  



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