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Claims Clearinghouse vs. In-House Billing: Pros, Cons, and Recommendations

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claims clearinghouse

When it comes to medical claims processing, healthcare organizations have two options: using a claims clearinghouse or in-house billing. Each has its own set of pros and cons, and choosing between them can be a challenge for medical billers, managers, and practice owners. In this article, we will discuss the advantages and disadvantages of each approach and how they can work together to achieve the best results.

Claims Clearinghouse

A claims clearinghouse is a third-party service provider that acts as an intermediary between healthcare providers and insurance payers to process claims. Here are some pros and cons of using a clearinghouse for your billing needs:

Clearinghouse Pros:

  • Faster Payments: A medical claims clearinghouse helps speed up payments by automating claims processing and reducing manual labor.
  • Efficiency: Clearinghouses streamline the claims submission process by automating tasks such as scrubbing claims for errors, verifying patient eligibility, and transmitting claims electronically to insurance payers.
  • Enhanced Accuracy/Higher Reimbursement Rates: Clearinghouses often have built-in validation systems that check claims for errors before submission. This significantly reduces the risk of rejected or denied claims and can lead to higher reimbursement rates.
  • Access to Payer Networks: Clearinghouses have established connections with a wide network of insurance payers, allowing healthcare providers to submit claims to multiple payers through a single interface.
  • Reduced Administrative Burden: By utilizing a clearinghouse to automate the time-consuming tasks that are often done manually, healthcare providers can focus more on patient care and reduce their non-clinical workload.
  • Improved Cash Flow: Because clearinghouses process claims faster, healthcare organizations can improve their cash flow for a more profitable organization.

Clearinghouse Cons:

  • Cost: Clearinghouses typically charge a fee for their services, which can add to the overall expenses of running a clinic or organization.
  • Learning/Incorporating New Software: The adoption of new technology can be a challenge and require extensive training for staff to learn how to use the clearinghouse software effectively.
  • Data Security: When incorporating medical software into your workflows, there’s always the concern of protecting your patients’ privacy from data breaches. While most medical software take steps to prevent the likelihood of compromising patient information, if you’re not working with a trusted, HIPPA-compliant clearinghouse, that risk becomes higher.

In-House Billing

Maintaining an in-house billing department involves hiring and training staff to manage the medical billing processes within your clinic or organization. Here are the pros and cons associated with this approach:

In-House Billing Pros:

  • Control: With in-house billing, healthcare organizations have full control over the entire billing process, including data security and quality.
  • Customizability: In-house billing allows for customization of billing processes to meet the unique needs of the healthcare organization.
  • Cost Savings: In-house billing can be cost-effective, especially for healthcare organizations with enough volume and resources to manage their medical claims processing.

In-House Billing Cons:

  • Increased Workload: In-house billing can be time-consuming and labor-intensive, causing an increased workload for the healthcare organization.
  • Slower Processing: Manual processing of medical claims can lead to delays in payment and negatively affect cash flow.
  • Skillset Limitations: In-house billing may require specialized expertise and skills that the healthcare organization may not have in-house.
  • Cashflow Bottlenecks: Approximately 30% of medical claims are either denied or lost each year. While that number might not seem too high, what happens to your practice if you’re not paid, or delayed payment, for 30% of the services you offer? These bottlenecks can hurt your organization’s financial health, as well as jeopardize your ability to continue to offer quality care.


Get a free demo of Apex EDI’s comprehensive claims clearinghouse today!


How Clearinghouse and In-House Billing Can Work Together

While both methods have their own pros and cons, many healthcare organizations find that a combination of clearinghouse and in-house billing can yield optimal results. Here are some recommendations on how to best leverage both approaches:

  • Patient interaction: In-house billers can handle patient inquiries, provide clarification on billing statements, and assist with resolving any billing-related concerns. Meanwhile, clearinghouses can electronically verify patient insurance eligibility and benefits. In addition, clearinghouses providing real-time information on patient coverage, co-pays, deductibles, and other related details. This holistic approach can help increase patient satisfaction along with claim approvals.
  • Reporting and Analysis: Clearinghouses offer detailed reports on the status of claims, including claim acceptance, rejections, and denials. Timely and accurate reporting helps in-house billers track the progress of claims and take appropriate action when necessary. In-house billers and managers can also use this information for financial forecasting, identifying inefficiencies, and other essential business operations.
  • Stay Updated on Payer Policies: Clearinghouses stay informed about payer policies, specific requirements, and changes. This allows them to update their systems and inform in-house billers promptly, thus reducing claim rejections and resubmissions. Also, by keeping everyone “in the know” you reduce the chances of unpleasant billing surprises for your organization and patients.

Moving Forward

Choosing between a claims clearinghouse and in-house billing depends on the unique needs and resources of each healthcare organization. Implementing a clearinghouse solution is a viable option for healthcare organizations looking to reduce stress, improve workflow, and increase revenue. By partnering with a trusted, HIPPA- compliant clearinghouse like Apex EDI, you gain a comprehensive solution that can streamline your billing processes, improve reimbursement rates, and enhance patient care. For more insight into how a claims clearinghouse can benefit your organization, schedule a personalized demo of Apex EDI today.

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