Clearinghouse
DefinitionThe intermediary that checks claims, converts them into the standard electronic format (837P) and routes them to payers, then returns statuses and ERAs.
Under HIPAA, a health care clearinghouse is an entity that converts health information between nonstandard and standard formats for other organizations (45 CFR 160.103). For a private practice it is the pipe between your claims and hundreds of payers.
What it does day to day:
- Front-end edits: catches missing fields (member ID, NPI, diagnosis pointer) before the payer sees them. These come back as rejections, not denials.
- Submission: sends the claim as an X12 837P to the right payer.
- Status: returns acknowledgments and payer status reports.
- Remittances: delivers ERAs (835s) once you're enrolled for them with each payer.
- Eligibility: many offer 270/271 checks.
The trap is the rejection queue: a rejected claim never reached the payer, so its timely filing clock keeps running while it sits. Check rejections weekly, fix and resubmit the same week.
Many EHRs submit through a partner clearinghouse behind the scenes; others, like Farela, connect to a clearinghouse account the practice owns.