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All Clearinghouses Are Not Created Equal: The Benefits of a Web-Based vs. Traditional Clearinghouse

As the Business Office Manager for an orthopedic practice that sends out 650-700 claims a day, I rely on my clearinghouse to support efficient and accurate revenue cycle processes. There are 23 physicians, 12 physician assistants, and 15 therapists at Orthopaedic Specialists of the Carolinas—and we’re growing. We need tools as dynamic as our practice.

That’s one reason why, in January 2008, we transitioned from our former traditional clearinghouse to a web-based clearinghouse solution. We’ve found some distinct advantages.

For example, a web-based system can help you identify and fix errors in a claim before submitting it for payment. This ensures the cleanest claim and reduces back-end rejections. With our earlier clearinghouse, we typically didn’t know about claim errors until we actually received the rejected claim. At that point, we needed to resubmit a corrected claim. The whole process could take several days to complete.

While traditional clearinghouse systems may initially cost less, a web-based system allows you to make changes quickly, get clean claims to the payer faster, and get paid faster—thus reducing days in accounts receivable. You can send off a batch of claims and know within 10 or 15 minutes whether they were accepted. Ultimately, by speeding up the whole revenue cycle, this helps the entire bottom line.

We also found the automatic eligibility tool to be a real lifesaver. It enables us to batch our eligibility requests to our clearinghouse. Then we receive a rejection report, highlighting only those patients found not eligible. Thanks to this report, our eligibility staff doesn’t have to verify all 700 patients the practice may see on a particular day. Instead, they focus their efforts on those patients who show up on the rejection report. This has allowed us to increase the number of patients we see—without negatively impacting our ability to verify eligibility.

Another big advantage of a web-based clearinghouse is its reporting capability. Our former clearinghouse had little to no reporting capabilities so I did not have a clear picture of my overall financial performance. Now, I create reports in real time to analyze revenue cycle performance and identify opportunities for improvement. I can also identify the types of processes that often yield errors, or pinpoint specific services and locations with higher-than-average rejection rates.

Additionally, our clearinghouse has some other features we’ve also found beneficial. Rejection aging alerts help us keep on top of unpaid claims rejected 30, 60, or 90+ days ago. You can look at snapshots by type of error, provider, location, and so on. The denial management feature details the entire claims process, showing me in real time the number of claims submitted, rejected, and in progress. For instance, after sending a batch of claims, I can quickly generate a tracking report that shows which claims went through, which need correcting, and which are in process for payment.

Investing in a comprehensive web-based clearinghouse solution is one reason we’ve been able to grow our business steadily—without adding a single new FTE in the business office. It helps us easily identify our potential and capacity for growth, while streamlining current processes. It supports new business without increasing the cost of doing it.

About the Author:

Regina Hayes is the Business Office Manager for Orthopaedic Specialists of the Carolinas, a three-location practice based in Winston-Salem, NC. She oversees all of the practice’s revenue management functions.