Clearing House

 What is Clearing House?                

        In medical billing, companies that function as intermediaries who forward claims information from healthcare providers to insurance payers are known as clearinghouses. In what is called claims scrubbing, clearinghouses check the claim for errors and verify that it is compatible with the payer software.


Medical billing clearinghouse services are designed to automate the revenue cycle process for health organizations. Among those services are clearinghouses that help you make the switch from paper, generating electronic claims for a cleaner, easier process. Simply put, claims that are sent electronically are paid much faster than paper claims. Claim errors are reduced to as low as 2-3%, compared to paper claims with an error rate of around 28%. 

What is the Function of the Clearinghouse in Medical Billing?

  • The clearinghouse checks to make sure that the procedural and diagnosis codes being submitted are valid and that each procedure code is appropriate for the diagnosis code submitted with it. The claim scrubbing edit helps prevent time-consuming processing errors.
  •  Each provider chooses which clearinghouse it wants to use for submitting claims. Most clearinghouse companies charge the providers for each claim submitted, and they also charge an additional fee to send a paper claim to a certain payer.

Why Is an Electronic Medical Billing Clearinghouse a Must?

  • Medical billing clearinghouse software catches errors that you may have made during the data entry process.
  • Once a clearinghouse catches those errors, they let you know in real time where the mistakes were made for each and every medical claim so you can correct them, thus reducing the chances of receiving rejected claims.
  • A medical billing clearinghouse saves you from spending valuable hours of your time waiting on hold following up on claim errors or rejections with several different insurance carriers.