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electronic clearing house


Electronic Claims Processing

Electronic claims processing has almost become a necessity in the field of medical billing. If you are not sending your claims electronically yet, you are probably too embarrassed to admit it. And if you are, you are probably wondering if the method you are using is the best. What is the real truth behind electronic claims processing?

Many of the larger insurance companies are really pushing providers to submit their claims electronically. Some are even calling the provider's offices and telling them that they are mandating electronic submissions by a certain date and that they will no longer accept paper claims. Others offer incentives to submit electronically, such as faster payment, or even no authorization required for services if claims are submitted electronically.

Bottom line, the real question for a provider is “is electronic claims processing really necessary for my practice” and “what will it require of me.”

For the first question, I think that everyone must realize that with the changes in technology electronic submission of medical claims is inevitable. Today's society is moving towards paperless transactions in many ways.

The second question will depend upon many things such as how large, or small, your office is, how much equipment you already have and how up-to-date it is.  You will also consider whether or not to bill directly to the insurance company or use a clearing house.

One of the biggest misconceptions of electronic billing is that it makes the billing in your office a lot simpler. In some ways it does, but it presents you with a whole different set of tasks that you didn't have before. I'm not implying that it makes anything harder. Just that there are things that go along with electronic billing that you did not have to do before such as reading and acting on reports and maintaining and updating the electronic software.

When you submit a claim on paper, the claim is both received and processed, or you never hear a thing. Hopefully in the latter case, your staff will call and check status on it after 30 days. Whether your paper claim has complete and accurate information on it or not, it will be handled the same way. You will either receive payment for the claim, or an explanation of benefits showing a reason for denial.

When you submit claims electronically, it is not quite so simple. First, you will receive a report letting you know if your batch of electronic claims was accepted or rejected. If a claim has incorrect data such as an incorrect date of birth, it will be rejected before it ever reaches the insurance companies claims processing system. You will receive a report, usually within 24 - 48 hours showing all rejected claims, and the reasons for the rejections. You will also receive a report showing the claims that were accepted with no errors.

It is very helpful to receive notice so quickly that your claim had incorrect information; however, you now have to make sure your staff is able to check on this report and take the time to find and correct the needed information.

What electronic billing is actually doing is letting you know sooner that you have problems with specific claims. When you are submitting them on paper, you generally don't find out about the problem claims until you are doing a follow-up report and calling the insurance companies. So by submitting your claims electronically, you are not eliminating all the problem claims, you are finding out about them sooner.

Once you decide to take the plunge into electronic billing, there are still choices to be made. Is the practice management system you are currently using capable of submitting claims electronically? If not, you will need to update or change your software. You will need to determine how you will submit your claims to the insurance companies. A clearing house may be the best option, or if you are a larger practice, or billing service, you may want to consider software that allows you to act as your own clearing house.

In any case, if you are not already using electronic claims processing, it probably would be wise to start researching your options. A good place to start is by contacting your practice management system support and asking them if they recommend any method in particular. Another way is to ask your colleagues. Electronic claims processing is a big step and it should not be taken lightly.

More information on
electronic claims processing and clearing houses

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