Want Fewer Denials, Faster Reimbursement? Improve Your Clearinghouse Relationship

Not all clearinghouses are equal, and what many healthcare providers don’t realize is that a clearinghouse is not a “one size fits all” operation. It is a conduit to your payers, but is not a neutral utility like water, electricity, or natural gas. Each clearinghouse has strengths and weaknesses

As with any vendor, there are tradeoffs. Some specialize in working with physician groups, others with hospitals; some offer the latest technology for handling mass claims, other pride themselves on responsive customer service.

Providers need to evaluate their clearinghouse on a regular basis to determine if the fit is still a good one. Note that if the fit is poor, your clearinghouse may not be at fault. But it is also possible that your current clearinghouse may no longer be a good fit for your organization.

Maybe your relationship was created years ago. We recommend to our provider clients that they evaluate their clearinghouse at least once a year and central to that should be, “What is your clearinghouse doing for you today?”

You need to understand your clearinghouse, from claims submittal to processing to posting. In your annual evaluation, there are four areas to focus on: Communication, cost, customer service, and connection (via technology).

Communication

There are overarching communication needs that hold true for any vendor relationship. When issues arise, are they communicated in a timely fashion? This is critical with clearinghouses as they control the pipeline to your payers. When you get a spate of denials, is there an escalation process in place so that you can make corrections quickly?

The healthcare financial environment today is one where denials are a drain on financial resources. Is the clearinghouse providing you with reporting that meets the needs of your analysts or revenue cycle professionals so that they can quickly drill down to the root cause and implement changes in workflow to prevent future denials?

It’s important to note that the level of communication also comes with a cost (see below). How far down the rabbit hole do you want to go? Do you need reports that can be loaded into dashboards for your executives? Do you want the ability to drill down into the data by denial? If so, does your clearinghouse provide such reporting and are you willing to pay for it?

Cost

Clearinghouses are necessary for getting claims to payers, getting those claims processed efficiently, getting payments posted, and quickly turning around denials. Most clearinghouses provide different levels of service for different prices.

Take custom edits for example. Many payers require custom edits, and if a provider has a broad payer mix, the ability to make those custom edits efficiently is a critical feature.

The main objective for any provider is to prevent denials, for denials directly increase the cost to collect revenue. Releasing dirty claims serves no one. If you recognize what a payer going to deny before it hits the payer, that puts cash in the door.

Customer Service

Different providers require different levels of customer service. To reduce costs, some clearinghouses move their customer support function offshore, but some providers find that disruptive. There are other clearinghouses that give the impression that customer service is a complete afterthought, one where the sale representative who gave the demo and promised the world disappears once the contract is signed.

Most clearinghouses, however, are responsive to their clients, but not all clients are the same. Large providers with high volumes of claims usually can get their issues addressed in a timely fashion. Small providers, as a rule of thumb, require more personal customer service because they lack the volume to get the attention they need. Therefore they might need to be with a smaller clearinghouse who can better help them manage exceptions when they arise.

Connection

No clearinghouse is willing to say they don’t offer the latest technology, but all of them offer different ranges and levels of features; some have all the bells and whistles anyone can ask for, and others prefer to focus features and enhancements in specific areas.

But there are common hurdles, be they regulatory or functional, that affect all clearinghouses and their clients. The biggest upcoming challenge that all providers should be considering when looking for or evaluating their clearinghouse is ICD-10.

Implementing ICD-10 affects everyone in the healthcare revenue cycle chain, and it will be especially challenging for clearinghouses. One of the many benefits they provide is a clean pipeline into payers so that providers don’t have to be responsible for updating all their data relationships with payers.

Will your clearinghouse be ready? Fortunately there is also recent history that may shed some light on how well they perform. Look at last year’s implementation of HIPAA 5010 standards. Was that transition handled smoothly? If the move to 5010 was fraught with exceptions and issues, you might want to review that project and identify what parallels might exist for ICD-10.

When looking at ICD-10, be sure to look at communication with your clearinghouse(s). How often are they providing updates? Is the clearinghouse engaged with provider? Have they discussed how, technologically, they plan to handle the implementation? Have the advised you of testing period?

The bottom line: Seek assistance

When evaluating your clearinghouse, don’t hesitate to call in your other partners. At ProSource, we regularly consult with provider clients about their clearinghouse options. What we have found, consistently, is that there is no “best” or “worst” clearinghouse, only ones that provide the best fit for a given provider.

For most providers, their annual evaluation of their clearinghouse should result in minor tweaks, which in turn will prevent larger issues from emerging in the future. More importantly, if and when the time comes to change clearinghouses, your organization has a firm grasp of the critical features it requires to keep the claims flowing smoothly without disruption. And that’s money in the bank.

About Shanna Rogers

Shanna Rogers is a supervisor with ProSource Billing, Inc., a part of the Array Services Group family of companies. Shanna  has 13 years of Revenue Cycle experience working with many types of organizations. She has been with ProSource Billing  for the last 10 years contributing to and managing projects.