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Is it time for a new clearinghouse? The top factors to consider

As a healthcare provider, your clearinghouse plays a significant role in your revenue cycle. Does yours feel like a trusted, value-driving partner? If the answer to that question is anything other than a resounding ‘yes!’, it could be time to consider a switch.

Changing your clearinghouse is no small undertaking. It comes with risk, but it can also be packed with reward if you select the right partner.

What does a clearinghouse do?

A clearinghouse is a service provider that acts as a sort of middleman between healthcare providers and payers.

A clearinghouse takes the data from a provider’s healthcare transactions and translates that data into a format that’s acceptable for commercial insurers and other payers to receive. Along the way, the clearinghouse checks claims for errors and verifies that payers process claims correctly.

A moment ago we used the term ‘middleman’ to describe the provider-clearinghouse relationship. It’s a term that often comes with the negative connotation of being an unnecessary third party. In reality, though, clearinghouses are virtually essential to keep healthcare organizations running smoothly.

Consider this: every one of the thousands of patients you serve is different. Each one receives a unique course of treatment and comes with their own unique coverage and eligibility data points. On the other side of the coin, there are thousands of payers out there, each with their own distinct set of rules and requirements for paying out claims.

Can you imagine trying to manually map patient and claims data to the correct payer-specific requirements for every single claim? It’s an all-but-impossible undertaking, and one that becomes even more complex when you digitize the process, introducing additional data security and HIPAA concerns.

Clearinghouses tackle this massive feat, helping providers get paid the correct amount, on time, with as few touch points as possible.

With that in mind, is your clearinghouse doing its job correctly? Here are the top factors to evaluate.

Top factors to consider when evaluating clearinghouse vendors

Customer service

There’s a reason many clearinghouses don’t address customer service in their marketing: because they don’t provide it. But what happens when you have questions? When your revenue cycle is at stake, you need someone on the other end of the line to answer those pressing questions.

You get what you pay for, and a cut-rate clearinghouse may not offer an adequate level of service to meet your needs.

Payer reporting

Since your clearinghouse touches every claim you submit, it’s in the perfect position to give you a play by play on your payer reimbursement rates, denial rates and turnaround time. Knowing your expected payment turnaround can inform the optimal time for follow-ups, while the ability to flag payer performance changes empowers you to identify and correct revenue leaks quickly.

Your clearinghouse should be able to provide easily accessible data by payer or financial class for side-by-side comparisons by procedure or over time. Predictive data on the month’s billing and cash projections should offer early alerts on any issues while there’s still time to make changes, rather than merely reporting on what went wrong after the fact.

Operational efficiency

Automation is one of the key functions of the clearinghouse. Increasing revenue cycle efficiency through simpler processes reduces operational costs and promotes revenue gains.

We all know time is money, and so are denials and staff turnover, both of which can be improved upon with the right clearinghouse partner. Your clearinghouse should give you visibility into all biller activity to promote active coaching on time management – for example, identifying opportunities to replace repetitive edits with custom business rules. Reducing cumbersome processes can improve employee morale, which aids in both productivity and retention.

Revenue cycle visibility

You can’t fix what you can’t see. Meaningful RCM analytics and reporting are a non-negotiable in your clearinghouse partner selection.

Look for a clearinghouse that can provide tools with predictive analytics that help you improve overall revenue cycle performance in real time, versus just at the end of the month. You should be able to monitor payer trends, payment timelines and performance across all departments that impact RCM, across your revenue cycle, stitching claim, remit, 277 and RTP data together to tell the whole story.


Consider what integration truly means for your company. If your clearinghouse can’t easily integrate with your existing technology infrastructure, the resulting costs and headaches can add up quickly.

Before signing on the dotted line, ensure that your clearinghouse of choice offers the connection you need to ensure data hygiene while accessing need-to-know information in real time.

What should your clearinghouse do for you?

To break down everything we’ve covered so far into one sentence: your clearinghouse should help you simplify and optimize your revenue cycle processes. This includes eligibility verification, claims and denials management, billing, and analytics. It should apply to government and commercial payers alike, eliminating the need for multiple systems to process different types of claims.

If this isn’t the case, it’s likely a good time to seriously consider a clearinghouse switch.

Inovalon’s suite of end-to-end RCM applications empowers providers to proactively reduce errors and boost efficiency, helping you collect more of the revenue you’ve earned.

    • Convenient insurance discovery and registration assurance tools mitigate claims denials at the front end of patient care.
    • A comprehensive view brings together data from your entire revenue cycle, giving you the full picture of denial sources and opportunities for improvements.
    • Real-time analytics on payer, payment and performance trends help you improve RCM performance and better predict cash flow.
    • Consultative services help you identify trends and risks, add custom business rules, answer questions, and improve your overall RCM performance.

Learn more about RCM Intelligence from Inovalon here.

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By Inovalon