A clearing house is a company that simplifies the medical insurance claims process by providing electronic submission and translation services between doctor and dentist offices and insurance companies. Although doctors and dentists are not required to use a clearing house to submit claims, clearing houses help speed up the process because they prescreen submissions so that mistakes can be corrected more quickly.
The medical insurance clearing house industry was established in the 1990s when doctor and dentist offices started submitting claims to insurance companies electronically instead of by mail. There are now dozens of regional and national clearing house companies. The first standard form that clearing house companies used to submit electronic claims was called the National Standard Format. The Health Insurance Portability and Accountability Act -- better known as HIPAA, which provides health care privacy protection -- includes a privacy rule implemented in 2003 that affects clearing houses. The rule established a new standard form for electronic health care claims that all clearing houses must use.
Doctor and dentist offices fill out claim forms and email them to the clearing house, usually in large batches. The clearing house sorts, formats and translates the information into the insurance company’s required format. It also checks the claims for errors before processing them for payment. The insurance company notifies the clearing house whether the claim was approved or rejected, and then the clearing house notifies the doctor or dentist office of the claim’s status. If the insurance company accepts the claim, the doctor or dentist office could receive payment in as few as 10 days.
Although there are no standard fee structures that clearing houses use to charge doctor and dentist offices, possible fee structures include startup fees, monthly flat fees and per-claim fees that are based on the office’s volume. Monthly fees to doctors and dentists average between $85 and $125. Clearing houses also charge insurance companies a flat monthly fee rate or a per-claim fee basis based on the insurance company's volume.
Many clearing houses also offer other services such as eligibility verification to determine the patient’s insurance coverage limits prior to treatment and patient statement services that automatically send statements to patients so the doctor’s office or insurance company does not have to. Other additional services may include claim status reports, rejection analysis, transaction summaries and secondary billing services. Some clearing houses include the additional services in their base coverage, while others provide them at an additional cost. Some clearing houses also offer services for doctor and dentist offices that still mail in paper claims.