Health Information Management

TOPIC: Understanding clearinghouses and other intermediaries

HIM Connection, October 15, 2003

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TOPIC: Understanding clearinghouses and other intermediaries

Intermediary companies that serve to collect, validate, and/or distribute claims, remittances, eligibility verification, claim status, and other transactions have become very prevalent as the health care industry has struggled to keep up with the vast network of trading partners and complex reimbursement structures.

Some of these companies are classified as covered entities under HIPAA; others are not. To be a covered clearinghouse under HIPAA, a billing service, re-pricing company, community health management information system, valued-added network, or switch must perform the following functions:

  • 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

  • Receive a standard transaction from another entity and process or facilitate the processing of health information into a nonstandard format or nonstandard data content for the receiving entity

    Clearinghouses that are covered entities are expected to comply with the privacy rule and other HIPAA regulations. These companies perform valuable functions on claims and other transactions. Today, these include:

  • Editing to ensure the transactions meet health plan-specific requirements

  • Validating that required information is present

  • Checking the totals balance

  • Identifying duplicates

    Clearinghouses provide connectivity among trading partners (providers, health plans, and other entities involved in the transactions process). Under HIPAA, clearinghouse services will significantly expand to reformatting transactions. This may involve taking nonstandard formats for health plans not yet ready to accept the standard formats.

    However, the role of clearinghouses may also diminish as covered entities follow the single standard set of data and formats. Editing functions will be reduced to checking only for missing data rather than for the data and format required by health plan-specific rules.

    This week's HIM Connection was adapted from an excerpt of the book, "HIPAA transactions made simple: Acheiving the benefits of EDI," by Margaret Amatayakul, MBA, RHIA, FHIMSS, with Micheal Cohen. Go to http://www.hcmarketplace.com/Prod.cfm?id=1528&s=EHIMC for more information or to order, and save $18.00 off the regular price.

    Check out the Editor's Choice section below for solutions to your records completion problems.

    Sincerely,

    Kate Alvarez
    Editorial Assistant
    kalvarez@hcpro.com



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