What is a clearinghouse?

A clearinghouse is the middleman that carries your claims to the payers, and carries the payers’ answers back.

You do not connect to two hundred insurance companies one at a time. You connect to one clearinghouse, and it speaks to all of them for you, in the strict machine formats each payer expects.

It does three jobs:

• Delivery. It routes each claim to the right payer.
• A first check. It inspects a claim before the payer sees it. If something is structurally wrong, it stops the claim there and tells you, which is why “rejected by clearinghouse” is a different status from “denied by payer.” A rejection never reached the payer at all.
• Return traffic. Acknowledgements, claim statuses, eligibility answers and remittances all come back through it.

Before a practice can send anything, it has to be registered with the clearinghouse, which creates the practice’s record there and returns an ID that rides on every claim. It is a one time setup and it costs nothing. See What does registering a group with the clearinghouse do?.

A rejection is not a denial. It means the claim never got in, usually because something on it was wrong. Fix it and send it again.