Electronic Billing
Beginner's Guide to Electronic Billing
Contents
- Definitions
- What does a clearinghouse do?
- What does 'Billing Direct' mean?
- Should I use a clearinghouse?
- Why would I use EZClaim's EDI services?
Definitions
| Clearinghouse | A company that passes claims and reports between a provider and insurance company. Similar to a post office. You give all your mail to the post office and they send it to all the different addresses. When people send you mail back, they deliver it all back to your single mailbox. |
| EDI | Electronic Data Interchange - A fancy name for electronic billing. You may hear phrases like 'EDI Services' or 'EDI Billing.' It simply means data is sent electronically instead of on paper. |
| ANSI 837 | Technical name of the HIPAA file format that contains patient and claim data to send to insurance companies. The full name is ASC X12N 837 Professional (004010X098A1). |
| Print Image | Name of the electronic file format that looks like the CMS-1500 form. Commonly used by clearinghouses but has limited functionality. |
| EOB | Explanation of Benefits - Paper report showing what payments the payer made and how they apply to each service. |
| ERA | Electronic Remittance Advice - An electronic version of the EOB. This normally is sent in the ANSI 835 format. |
| ANSI 835 | Technical name for an ERA. |
| Payer | Another name for 'insurance company'. A company that pays you money. |
| Payer ID | Normally a 5 digit number that represents a payer. Similar to social security numbers representing people. When sending claims around electronically, there is no need for a mailing address, the payer ID directs the claims to the correct payer. |
| Direct Billing | Sending claims directly to a payer instead of going through a clearinghouse. Not all payers accept direct electronic claims. |
What does a clearinghouse do?
A clearinghouse will accept all your claims in a single batch. The clearinghouse then splits the claims into batches and sends them to individual payers. At the same time, the clearinghouse will gather any available payer reports and send them back to you. A clearinghouse will also scrub your data for errors to prevent lengthy delays in billing. This diagram shows the process.
What does 'Billing Direct' mean?
When a provider submits electronic claims directly from EZClaim to an insurance company such as Medicare, that means they are 'billing direct'. EZClaim offers packages for direct billing (ANSI 837 billing). Not all insurance companies accept direct electronic claims.
Should I use a clearinghouse?
If you send to multiple government or commercial payers then a clearinghouse is more efficient. A clearinghouse allows you to send all your claims to one location and receive all your reports from one location. The clearinghouse will also prevent you from making common mistakes by checking your claims for problems before sending to the payer. If you send a large volume of claims to 1 or 2 payers and are very experienced in electronic medical billing, you may want to investigate direct electronic billing.
Why would I use EZClaim's EDI services?
EZClaim provides clearinghouse services that include free software support. By utilizing both EZClaim software and EZClaim's EDI services, you have a one stop shop for all your medical billing needs. EZClaim's EDI Packages