Clearinghouses are more than just utilities for moving claims from provider to payer. They are integral to improved healthcare interoperability and the quest to extract valuable insights from clinical and administrative data.
When talking about interoperability in healthcare, clearinghouses aren’t always the first thing that comes to mind. For many years, the conversation has been much more focused on the exchange of purely clinical data from one provider to another – a challenge that is still only partially solved even after decades of hard work.
While clinical data exchange is certainly vital to success for patients, health plans, and providers, it’s just the tip of the interoperability iceberg. Accurate claims data is equally important for making informed, proactive decisions about patient care.
Claims data doesn’t just offer deep insights into everything from overall provider performance patterns and to an individual’s ability to engage with their care plan. It’s also essential for the day-to-day business of being a payer: reimbursing providers for the wide variety of services aimed at improving member health.
Clearinghouses are the technology that makes this all possible. By coordinating the secure flow of claims information between providers and health plans, clearinghouses quietly and steadily keep the $4.3 trillion healthcare industry humming along.
It’s easy to look past this type of “middleware” solution, especially when it works well enough to avoid causing any major issues. But skipping over clearinghouses during the interoperability discussion would be a mistake, especially as payers and providers start to engage with increasingly complex, unstandardized data sets and new types of clinical and financial partners in a more patient-centered, value-based environment.
It’s time to take a closer look at the clearinghouse as a fundamental enabler of trusted interoperability between trading partners and ensure that both payers and providers are maximizing the value of what these important platforms can do.
The crucial role of clearinghouses in healthcare operations
Every year, healthcare providers submit hundreds of millions of claims for patient services to thousands of health plans across the nation.
Just building the electronic pipelines to shuffle all this data back and forth each day is a monumental task. Making sure that the information is accepted and processed in a standardized manner, correctly integrated into a health plan’s internal reimbursement systems, and returned to the provider in a timely manner with the right payment – or a clear explanation for denial – is even more challenging.
Clearinghouses work in conjunction with electronic billing software to handle these processes digitally, proactively identifying common data integrity issues that may result in a denial or delay. Once a provider generates a claim using the standard 837 claim format, the clearinghouse accepts the file, scours it for any obvious errors, and sends it on to the correct health plan if it passes all the checks.
The plan then conducts further analysis for clinical and administrative suitability of the claim and makes a decision on whether to reimburse as requested, deny outright, or ask for clarification.
The more sophisticated and trustworthy the clearinghouse, the less work has to be done on each side of the partnership. Robust clearinghouses with more automation, advanced analytics capabilities, and a trusted position within the health IT community are associated with lower overall denial rates and higher first-pass success rates, which is good for providers, as well as reduced administrative burdens on the payer side.
The American Medical Association estimates that electronic clearinghouses can reduce the cost of claims processing by approximately 60 percent compared to similar paper-based workflows, freeing up time and capital to devote to other clinical or operational priorities.
According to CAQH, transitioning to fully electronic transactions could save the industry up to $25 billion per year, or 41 percent of annual spend in 2022.
Using clearinghouses to create a network of networks for better claims data exchange
A single clearinghouse cannot work in isolation, because health plans don’t just receive claims from their established, contracted in-network providers. They also get claims from an untold number of out of network clinicians from anywhere in the country.
This can be challenging on several levels. First, reimbursement rates and requirements are different for these partners. Second, out-of-network providers may not be familiar with the correct formatting and data requirements necessary to get their claims adjudicated quickly. And third, without being directly connected to the prospective payer’s proprietary clearinghouse, these providers must simply trust that hitting “send” on their claim form will result in getting that information where it needs to go.
This is where the right clearinghouse solution can take interoperability to the next level. Clearinghouse vendors must work with their peers, trading partners, and competitors to ensure that all claims, no matter their origin, are routed to the appropriate recipient with as few gaps and errors as possible.
Data standards like ASC X12 Version 5010 make it possible for clearinghouses to assemble into “networks of networks” and make certain that any provider can reach any payer whenever necessary.
Fortunately, the ASC X12 standard is well established in the electronic data exchange community, and claims are typically highly structured documents with relatively few unknowns, making it easier for clearinghouses to engage in the type of interoperability that is often so elusive in the clinical data ecosystem.
Trust as the bedrock of interoperability between payers and providers
With trillions of dollars and huge volumes of sensitive clinical data shooting across the claims superhighways at any given moment, it’s essential that all parties involved have full and complete trust in their clearinghouses.
Choosing a clearinghouse with a strong reputation for security, service, experience, and responsiveness can turn an oft-overlooked piece of the interoperability puzzle into a valuable and proactive partner for improving clinical care and administrative efficiency.
A prospective clearinghouse solution provider should be able to demonstrate its mature and wide-reaching connections with peers across the industry to foster seamless interoperability for both in- and out-of-network claims. Platforms should also include process enhancements such as tools to generate cleaner claims, timely provider notifications at key steps in the process, and helpful resources to address any provider questions or problems that arise before or during claims submission.
With a trusted and collaborative clearinghouse, health plans and providers can work together more efficiently and effectively to accomplish their daily tasks while moving into the optimal position to take advantage of everything that rich, robust claims data has to offer.
Clearinghouses shouldn’t just feel like part of the furniture. Instead, they should become an active and integrated part of a health plan’s larger interoperability goals. By simplifying and streamlining the claims submission process, clearinghouses don’t just save time and money for payers. They can also unlock the full potential of claims data for broader financial and clinical analytics purposes, such as provider performance monitoring, population health management, and other high-priority value-based care activities.