what is a clearinghouse in healthcare

A clearinghouse is an institution in the healthcare industry that electronically transmits different types of medical claims data to insurance carriers. Clearinghouses prescreen and clean medical claims data, searching for errors and inaccuracies. Once a claim passes inspection, the clearinghouse securely transmits the electronic claim data to the specified payor over a secure connection that meets strict standards outlined by HIPAA. Clearinghouses are essentially electronic stations or hubs that allow healthcare practices to transmit electronic claims to insurance carriers in a secure way. They are intended to serve as a middleman between healthcare providers and insurance payers, checking the medical claims for errors, ensuring the claims can get paid, and accelerating the payment of claims. Clearinghouses can also process or facilitate the processing of health information received from another entity in a nonstandard format or containing nonstandard data content into standard data elements or a standard transaction.