Healthcare Clearinghouse 101: Tools to Accelerate Clean Claims

There are a lot of details that go into every step of the medical payment process. Providers and practices rely on billing experts to generate claims. But even the experts make errors. These errors can lead to denied claims and delayed payments. Working with a healthcare clearinghouse can improve your claims processing for fewer errors and faster payments. 

Read on to learn how a healthcare clearinghouse can improve your medical revenue cycle management.

What Is a Healthcare Clearinghouse?

A healthcare clearinghouse is an organization with expertise in medical billing that serves as a bridge between providers and payers. Clearinghouses offer a variety of services, including:

  • Claim Submission: Clearinghouses standardize claims from providers and then transmit them to the appropriate payer. 

  • Claim Scrubbing: Clearinghouses ensure claims meet payer requirements by reviewing claims for errors and missing information. 

  • Data Standardization: Clearinghouses translate all claims into the standardized ANSI X12-837 format required by HIPAA and payers, regardless of the original software format.

  • Secure Transmission: Clearinghouses follow HIPAA regulations and ensure that all claims are transmitted securely to payers.

  • Reporting and Monitoring: Clearinghouses provide providers with detailed reports on the status of submitted claims, allowing them to track progress and address issues as they arise. 

There are different types of clearinghouses. They tend to specialize in particular types of claims, such as:

  • Pharmacy claims 
  • In-patient claims
  • Outpatient claims 

A single provider, hospital, or billing specialist may work with multiple clearinghouses to maximize efficiency.  

Are healthcare clearinghouses covered under HIPAA?

The simple answer to this question is yes. Healthcare clearinghouses are considered covered entities under HIPAA and they are required to comply with all HIPAA regulations. In particular, clearinghouses must ensure the privacy and security of health information. In addition, clearinghouses must comply with any applicable state or local regulations.

How Healthcare Clearinghouses Work in the RCM Ecosystem

Healthcare clearinghouses are the middleman in the medical revenue cycle management. Providers give billing specialists — either in-house or a service — with information about patient care so they can prepare claims. Claims need to go to insurance companies, which then reimburse providers for care. 

Clearinghouses are the middleman, finalizing claims for submission insurers and processing payments to providers.

Claim Scrubbing

A clearinghouse scrubs claims to make sure they're clean, without errors in coding or missing or incorrect information. Think of a clearing house as an editor: one last set of eyes to look at a document before it's considered accurate and complete. 

Reducing Payment Delays

Clearinghouses can also reduce the number of denials through their thorough scrubbing process. Every denial is a delayed reimbursement, as well as a cost to your practice. According to a recent report by Becker's Hospital Review, it costs a provider an average of $43 to appeal a denied claim. Over time, the cost of appeals starts to add up and takes a bite out of revenue. 

Healthcare clearinghouses track common reasons for denial and apply that knowledge to your claims. This can reduce added costs due to denials to stabilize revenue cycles.

Payment Processing

Clearinghouses can automate payments to medical practices, using software to reconcile payments with their respective claims to help you get paid faster. They can also generate invoices and provide online platforms for patients to make payments quickly and easily. 

Common RCM Pitfalls — and How the Right Platform Avoids Them

Healthcare RCM keeps advancing as technology gets more sophisticated and precise. There is less room for error as insurers apply AI tools with strict parameters to claims processing.  Billing systems need to employ the same degree of precisions to prevent unnecessary denials. And providers need visibility into the claim status at every step in the process. 

Outdated systems that rely on manual data entry and editing are susceptible to errors that lead to denials. Billing systems that aren't compatible with EHR systems and other provider data platforms may lead to delays, incomplete data, and problems with  eligibility verification on claims. Lack of appropriate flagging and proactive claim editing may increase denial rates 

RCM platforms like PUREDI can bring billing processes into step with insurance claims processing. PUREDI's medical billing software  Our error checking and denial prevention engine helps scrub claims before they head to the clearinghouse. The result is fewer errors throughout the RCM process and reduced risk of denials from insurers. 

What Does a Modern Healthcare Clearinghouse Look Like?

The most effective clearinghouses are adopting technological tools to support RCM tasks, while keeping humans with real-world expertise in the loop. A successful system is one that combines industry experience and knowledge with cutting edge automation for an effective blend of speed and accuracy for reduced billing rejection.

What to Look for in an RCM Partner (Not Just a Clearinghouse)

As you look for an RCM partner, look at how they can improve your billing processes and reduce delays in reimbursements. Factors to consider include:

  • End-to-end RCM automation: RCM systems should be compatible with your EHR system to reduce errors due to manual data entry.

  • Proven integrations with multiple clearinghouses: Your RCM partner should be able to easily transmit complete claims to each clearinghouse that services your payers.

  • AI-powered claim edits and eligibility verification: Claims should be error-free before submission to maximize revenue and avoid CO-29 denial codes.

  • Custom analytics and real-time tracking: You should be able to check the status of in-process claims and get reports that show where your RCM process is working and where you can make improvements.

  • Responsive support team: Staff should be available for customer support.

PUREDI has over two decades of experience helping practices optimize revenue, improve cash flow, and reduce administrative burdens. PUREDI offers a customized, data-driven approach to RCM, using automation for faster claims processing, high levels of accuracy, and fewer denials.

How PUREDI Redefines the Healthcare Billing

When you work with PUREDI you'll get a full-service revenue cycle management tailored to your specific needs. When you partner with PUREDI you can count on:

  • Custom Reports: Our platform offers custom reporting & insights so providers can use real-time analytics to identify revenue opportunities and reduce inefficiencies. 

  • Scalable Technology: Our RCM system can seamlessly scale as your practice grows. You can rely on consistent service as you increase patient volumes and bring on additional providers.

  • Seamless workflows with built-in compliance: Our systems integrate with your EHR and billing software without compromising privacy and security, 

At PUREDI we offer cutting-edge technology paired with human experience and expertise. Our automated tools streamline claims scrubbing and insurance eligibility verification for faster, more accurate claims management. We also offer advanced reporting and analytics to give you valuable insights for practice management. 

To learn more about PUREDI's full suite of medical billing and management tools, contact us today to schedule a consultation.

Recent Blog Posts

Healthcare Clearinghouse 101: Tools to...

There are a lot of details that go into every step of the medical payment process. Providers and...

June 3, 2025 READ MORE

How to Stay Compliant and Prevent Modifier...

Modifier misuse isn’t just a coding error—it’s a compliance landmine. A simple mistake like...

May 12, 2025 READ MORE

The Ultimate Guide to Revenue Cycle...

As in any other business, revenue is crucial for keeping your healthcare agency functioning like a...

May 5, 2025 READ MORE