How to Choose the Right Clearinghouse

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person learning how to choose the right clearinghouse

When it comes to behavioral health treatment, insurance reimbursement is one of the primary concerns for practice owners, clinicians, and clients alike.

Practice owners need insurance claims to be reimbursed promptly and on a predictable schedule, with as few claims denials and delays as possible. Problems in any of these areas can cause significant challenges with cash flow and revenue cycle management, which are issues every business owner wants to avoid.

For clinicians, CPT (Current Procedural Terminology) codes and insurance documentation are essential to mental health service delivery. But it’s something every therapist wants to spend as little time on as possible.

Finally, uncertainty about coverage and reimbursement rates increases stress for patients when they’re already going through personal difficulties. Clients want to feel confident in choosing a practitioner, starting treatment, and knowing the financial side of things will be looked after, so this doesn’t become a barrier to their future care.

While it’s not the only issue at play, choosing the right clearinghouse can solve many of these common mental health practice billing challenges.

To understand how, we’ll start with an explanation of what a clearinghouse is, followed by the key factors to consider when searching for the best one for your needs.

What Is a Clearinghouse?

A medical billing clearinghouse is an intermediary between a healthcare practice and an insurance company. In short, a clearinghouse receives claims information from a provider, reviews the claim for accuracy, and then forwards it to the payer in the required format.

It’s not mandatory to use a clearinghouse. But medical billing is complicated and time-consuming, so many businesses use a clearinghouse to streamline the claims and reimbursement processes.

The exact operations of each clearinghouse will vary. However, most provide the following services after they receive claims information:

  1. Check the claim for errors. Also known as “scrubbing,” a healthcare clearinghouse reviews each claim to ensure accuracy. They usually check a patient’s name, insurance details, demographics, and other information required for a claim.
  2. Review billing codes. In behavioral healthcare, it’s essential to use the correct mental health billing codes for each occasion of service. Doing so ensures you get the maximum reimbursement for care provided and reduces the chance of claims being queried, delayed, or rejected.
  3. Ensures compatibility. Each payer can have different requirements regarding the format in which claims must be submitted. A provider’s billing software often doesn’t match an insurer’s requirements. When this occurs, a clearinghouse adjusts the claim to the payer’s accepted format.

This process occurs over secure HIPAA-compliant electronic connections, meaning no physical paperwork is required to submit and be reimbursed for a claim.

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Why Do Behavioral Health Practices Need a Clearinghouse?

It’s possible to operate a mental health and substance use recovery practice without a clearinghouse. But if you do, you’ll need to allocate staff time and resources to manage the end-to-end claims and reimbursement process. This requires hiring additional staff, asking clinicians to shoulder some of the administrative burdens, or combining both.

Healthcare businesses that don’t use a medical billing clearinghouse often report the following problems:

  • Having to allocate excessive staff time to submitting and managing claims
  • Delays in payments due to errors in claims requiring double, even triple handling of each claim
  • Suboptimal revenue due to a failure to optimize mental health billing codes
  • Disgruntled patients who get frustrated about getting caught up in disputes between providers and payers

Overall, using a clearinghouse helps behavioral healthcare practices optimize revenue cycle management and maintain a healthy level of cash flow. It frees clinical and administrative staff to focus on their core business areas. And it improves patient experience, which is increasingly recognized as an essential component in delivering high-quality therapy and healthcare. 

How to Choose the Right Clearinghouse for Your Needs

With a large number of clearinghouses in operation, it makes sense to take the time to choose a partner that aligns with the specific needs of your practice. Below are some of the things to ask about when you’re evaluating potential providers.

Flexibility in Cost

For a medical billing clearinghouse to provide a positive return on investment (ROI), costs should be flexible according to the needs of your business. Cost-related factors to look out for include contract length, service additions/exclusions, and volume-based pricing. A good clearinghouse can offer several options in each of these areas, enabling a viable solution tailored to your needs.

Customer Support

Even though a clearinghouse is a tech-focused operation, you shouldn’t feel stuck on hold with a telco or insurance company when you contact your provider. The best clearinghouses provide prompt and responsive customer service for any claims-related issues that might arise. Before choosing a provider, check whether they have a dedicated technical support line, their average wait time for assistance and if they provide the option of secure messaging through a client portal.

Claim Processing Times

Getting claims off to the payer for reimbursement is one of the most important roles of a clearinghouse. Ideally, you should expect to know within 24 hours or less whether a submitted claim has any errors or has been submitted to the insurer. The ability to check the status of individual claims in a client portal is an advantage. Also, a mental health practice billing clearinghouse should have a hassle-free process to request additional information to rectify any identified errors in a claim.

Learn more about Apex EDI, an industry-leading clearinghouse.

Connections to Payers

Generally, clearinghouses can only process claims with payers they have a connection with. So if yours doesn’t work with the insurers your clients use, or isn’t able to grow with changes in the market, many of the benefits of using a clearinghouse will vanish. Fifty-five entered the US healthcare market in 2022 ( a 21% increase over 2021). And well over half of all consumers have the ability to choose from five or more plans. This means it’s more important than ever to use a clearinghouse with a connection to a wide variety of payers.  

Ease of Use

Finally, you should choose a clearinghouse that’s easy to use for you and your staff. Health insurance claims and reimbursement will be complicated for the foreseeable future, but that’s no excuse for a medical billing clearinghouse to be difficult to deal with. Remember, their entire job is to take the headache out of claims and reimbursement. So whether they achieve that through an intuitive client portal, exceptional customer service, proactive assistance to rectify claiming errors, or all three, the clearinghouse you choose should be easy to work with. Period.

The Premier Solution for Behavioral Healthcare Providers

Interfacing with insurance systems doesn’t come naturally to most mental and behavioral health service practitioners—and that’s ok.

After all, you didn’t get into healthcare to become an expert at billing and insurance claims. You want to help clients heal and recover to the best of your ability, with the freedom and autonomy of operating a successful private practice.

Yet revenue cycle management problems remain the main reason private practices fail.

Too often, well-meaning mental health and substance use recovery providers neglect the financial side of their business, only becoming aware of the need to change when it’s too late.

To put your business in the best position to thrive and grow, choose a sophisticated digital practice management system like TheraNest Enterprise, which offers all the features you need without any added complexity.

For optimized behavioral health revenue cycle management, pair Theranest with our industry-leading medical billing clearinghouse—Apex EDI.

To learn more, download our free ebook, 10 Steps to Establish Long-Term Revenue Cycle Management, and book a demo of TheraNest Enterprise today. Our customer success managers are always on hand to answer any questions you might have. And you can sign up for a free, no-obligation 21-day trial directly through our website.



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