How Clearinghouses Can Improve Your Collections

Over my many years of experience as a Chief Financial Officer and health care consultant I have found that dealing with private insurance and Medicare Advantage billing and collections is a nightmare.  Before we had clearinghouses most claims were sent in via paper.  Once you mailed in the paper claim the collection nightmare began.  You would wait for 30 days and call the insurance company to check the payment status on your claim.  They would say they did not receive the claim so you would mail them a new claim.  You would wait 30 days and call the insurance company to check the payment status on your new claim and you would be told they had not received your claim.  This process would continue for several more attempts to submit the paper claim.  When the claim was six month old the insurance company would tell you that your claim was not timely filed and would be denied.  Now remember you probably submitted this paper claim at least 5 times. 

One thing to always remember about private insurance and Medicare Advantage companies is they do not make money paying claims.  They make money collecting insurance premiums and avoiding to pay claims.  Failure to meet timely filing is one of their all-time favorite excuses for not paying claims.

Now what happens if you use a clearinghouse to submit your claims? First your claim is submitted electronically.  If you use the right clearinghouse you will be able to obtain proof of timely filing of the claims which eliminates the situation above.  Next most clearinghouses have some electronic edits built into their software.  You will know right away if your claim failed to meet their edits.  I have seen cases where it was taking 90 days to pay a paper claim from a particular private insurance company and if that same claim was submitted electronically via a clearinghouse it would be paid in two weeks. 

Remember that clearinghouses will not correct low payment rates private insurance companies and some Medicare Advantage companies are paying for your services.  They will not eliminate the deductible and coinsurance the insurance companies are requiring to be paid from the patient, but you should have a better record of submission of your claims and any reasons for denials.

The use of a clearinghouse could cost your company as little as $100 per month, which is well worth the price. I have utilized ZirMed and have been very happy with their services.  I have also used Office Ally.  There are many other clearinghouses such as Emdeon, Apex EDI, and Gateway EDI.  I would check with the company that provides my billing software and see which clearinghouses they currently utilize.

I do not recommend trying to obtain higher volume of private insurance and Medicare Advantage patients, because for many of these patients you will actually lose money.   I have a session titled Financial Strategies to Increase Profitability in our “Exploring Trends and Routes for Success” Home Health Seminar which will be held in Las Vegas, NV on January 28^th to January 30^th . The session will shows methods to utilize to increase your home health agency profits and how to determine which patient to market and which patients to avoid.