Medical billing clearinghouses are simply middlemen that take electronic medical claims information and then submits that information electronically to insurance companies that they are contracted with.

So how does this impact you as a prospective billing business owner? Look at it this way:

Your client sends you a medical claim in superbill format, you input that information into your billing software, you print out that information on to a CMS1500 form, you mail that form out to the appropriate insurance carrier, the insurance company checks the claim for any errors, if everything is correct (called a clean claim) they submit payment to the physician for the services rendered and then you bill/invoice the physician for the services that you provided them. Now, how long do you think that process will take and what would be your expense? Well if you were to do this for each and every claim, for each and every client I can assure you that it would only take about a month and some weeks before you'd be out of business.

Medical billing clearinghouses were born out of the necessity to cut down on the amount of time it took for medical claims to be accepted and processed by insurance companies. Today the process is also saving the environment because less paper is being used to complete the reimbursement process.

However, you must make sure that you choose a medical billing clearinghouse that is contracted with several insurance carriers (called Payors) to ensure that your claims will be handled electronically from beginning to end. If you send a claim to a clearinghouse and the insurance company that the claims are going to does not accept or is not contracted to accept claims from the medical billing clearinghouse then the clearinghouse will have to print and mail the claim on your behalf (usually at an additional fee. This is called dropping the claim to paper).

One of the great things a clearinghouse does is perform error checks on each claim to make sure that all the appropriate boxes on a claim are filled in. While error-checking is a great feature especially for new billers it does not mean it will catch incorrect information that you may have input into a box. Once you submit all the claims for a particular day at the same time to the clearinghouse (called a batch transmission) and all the information is checked the clearinghouse will send you a confirmation (called a transmittal report) to verify the amount of claims sent as a receipt.

Home based billing is a business that provides physicians with several levels of services and medical billing clearinghouses do the same for the MB business owner. Be absolutely certain that you shop around for medical billing clearinghouses that best fits your needs and budget but DO NOT choose one strictly because of your budget. Take into consideration the level of customer service you will receive if you have problems, which you will!, because if you have to wait due to customer service issues on behalf of your clearinghouse you could be losing money, creditability, and clients.

Lastly, pay special attention to the startup and enrollment fees that you may have to pay for each practitioner or practice you will be submitting claims for because those charges take away from any profits that you as a MB business owner will make. There are medical billing clearinghouses in the marketplace that charge flat fees regardless of how many physicians you bill for now or in the future so proper research is the best way to keep your medical billing business expenses to a minimum.