Paid vs. Free Medical Billing Clearinghouse

by Samantha
(Dallas, Texas)

Free medical billing clearinghouses have the obvious benefit of being more cost effective for the medical provider or billing company when filing claims electronically.


The two most popular free clearinghouses are Office Ally and Availity. Like all clearinghouses, they are reimbursed by the insurance companies. However, unlike most other clearinghouses, Office Ally and Availity do not charge the provider or billing company for the majority of their services.

The fee based clearing house will typically provide more services and have relationships established with more medical billing software vendors.

The bottom line is that paid medical billing clearing houses are usually better for a new medical billing service since they provide more training and support, while a free clearing house will often be the better alternative since it is cheaper and the more experience medical billing services should not need as much hand holding. Of all the free medical billing clearinghouses, Office Ally does appear to be making the most aggressive attempt at offering as many features and support as the fee based clearinghouses.

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Free Medical Billing Clearinghouses May Be A Thing of The Past
by: David

The free medical billing clearinghouse model may go the way of the dinosaur. Not too many years ago a free clearinghouse could be very profitable, thanks to the payments (incentives) paid by the insurance companies, to encourage insurance claims to be sent electronically as opposed to paper claims since it was much cheaper for the health insurance companies to process electronically.

Today, everyone prefers electronic billing so there is no longer a need to incentivize electronic filing to clearinghouses. With fewer insurance companies paying anything to clearinghouses for the claims and those that do pay, are paying far less per claim then they did years ago. The "free" clearinghouses are going to have to sell other complementary products for a fee or they will need to start charging a per claim or monthly fee to healthcare providers and medical billing companies like the more typical "paid" clearinghouse model. I'd like to see the "free" model survive but I don't see how it can. Like any business, the medical billing clearinghouses have to be profitable to stay in business.

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Paid beats Free Clearinghouses during times of big changes
by: Mike K

I'd put my money on a paid medical billing clearinghouse VS free if there is any chance you will need a lot of customer support. Good customer support is obviously important for new medical billing companies, but is also very important for all billing companies when big changes happen to our industry, such as the introduction of NPI numbers and the change from icd9 to icd10 codes.

Let's face it. You get what you pay for. I think it would be unreasonable to expect the same level of customer support from a free VS paid clearinghouse. Whether a free or paid clearing house, both get reimbursed from most insurance companies. But regardless if it's a free or paid business model, each still needs to make a profit to stay in business and I don't know how a clearinghouse could provide the level of customer service needed for a busy medical provider's office or billing company without charging something per claim or at least a monthly fee.

One final thought even though this probably should have been my first thought. When choosing between a paid or free clearinghouse be sure that your practice manager software is compatible with the clearinghouses you're considering.

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Other options
by: Anonymous

I find your information helpful and interesting. We are currently using Availity. We are a small company so it is working for us. However, being an administrator and using solid software, I feel like it could easily do more without much effort. I would be interested in hearing what other good free clearinghouses are out there besides Availity and Office Ally.

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Medical Billing Clearinghouse
by: Anonymous

I agree with Dave's analysis concerning free VS paid medical billing clearinghouses. My only concern is the amount of time it would take the billing service to switch over all of their doctors to a free clearinghouse. The commercial carriers are not a problem, but if all of your doctors participate in medicaid, you have to wait four to six weeks in some states before you are set up to file claims electronically.

The only way I can think of to minimize this problem is to move over one doctor at a time just in case you have a major problem with the new clearing house. This way you don't have all of your doctors crashing and burning at the same time :-)

Michael

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Free Clearinghouse
by: Anonymous

I think your article is very interesting. I know I cannot speak on behalf of all free and fee-for-service clearinghouses but I have been involved with both models.

My billing service started with a fee-based (very expensive BTW)clearinghouse. They were far from perfect and occasionally we shot ourselves in the foot but they were able to hold our hands in our early years and guide us through the EDI process. Having gained that experience we decided to switch to a free clearinghouse.

We have been thrilled with the systems, service and support. Not to mention increasing our bottom line. Long story short, if you are a new billing service or starting a new billing department consider starting out with a fee-based clearinghouse. Get lots of experience under your belt before deciding to switch to a free clearinghouse. Your bottom line will be glad you did.

Dave
www.accuclaim.com

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Free Medical Billing Clearinghouse
by: Anita

Samantha,

I agree with most of your post except for your insinuation that you will not get as much training and support with a free medical billing clearinghouse as you would with a fee based clearing house. I think you're failing to take into
account that most of the profit a paid or free clearing house makes is from the fees they receive from the insurance companies not the monthly fees or per claim charges.

The quality of service, ease of use and customer service varies tremendously between clearing houses and I can think of several free clearinghouses that I would put up against the top paid clearinghouses.

I would suggest you take a look at a few of the top free medical billing clearinghouses and as with any clearing house, be sure they have services you need and have agreements with the majority of the insurance companies that you file to.


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