Updated on: March 16, 2016

Clarifying the Role of Clearinghouses in ICD-10 Transition

Original story posted on: January 24, 2014

In spite of what you may have heard, clearinghouses are indeed ready to facilitate the end-to-end testing of ICD-10 claims between providers and payers.

In fact, they have been ready for two years—since implementation of the 5010, according to Gloria Chung, chief operating officer at Office Ally, LLC—one of the three clearinghouses who joined the January 21 “Talk-Ten-Tuesday” broadcast. Another guest, Tim McMullin, executive director of the Dallas-based Cooperative Exchange, an association for clearinghouses, adds that they’re just waiting for the payers to get ready.


Mary Hyland, the chief privacy officer and vice president of regulatory affairs with The SSI Group, Inc.clarifies this comment further, saying,For the most part, we have been waiting for payers to define their testing initiatives, and the approach they will take for testing is a critical element. Are they reaching out to providers? Are they including clearinghouses in their mix? Are they doing medical-based scenario testing? Or are they conducting validation testing? There are many types of testing, and payers may not be ready yet.”

The bottom line, Chung said, is that the bulk of the changes and updates that need to be done falls on providers and payers.

“When you’re testing with your clearinghouse what you are really testing is your ability to code in ICD-10, your software’s ability to transfer that information to the clearinghouse, and your payer’s ability to adjudicate the claim with ICD-10 codes,” she said.

Clearinghouses get into the act, at a payer’s request, by facilitating the end-to-end testing. Providers that intend to send their ICD-10 test file to clearinghouses should find out what is expected. Even though each may have a slightly different process, Chung outlined the basic steps as follows:

  • Choose what you want to include in your test file. Use claims that represent a diverse sample of scenarios you see on a day-to-day basis.
  • Find out how your clearinghouse wants you to identify the test file and save it with that name. This is very important because the clearinghouse system must be able to identify the claim submission as a test and not a current submission.
  • Verify that the claims were transmitted correctly and that the payer received the correct codes and can pay them correctly. If there are any problems, address the issues and resubmit the test file.
  • Be sure to clarify any questions you have with the clearinghouse.

Daily Duties

Highland describes clearinghouses as the “go-to-people for transmitting claims”—similar to the U.S. postal service except they deliver the provider’s package (claims, attachments, etc.) electronically. She emphasized that they do not assign codes to claims or change the assigned codes in any way, nor do they pay claims or test claims.

However, there are many other tasks that clearinghouses do before submitting claims to payers, said Azadeh Farahmand, head of Greenway Clearinghouse Services. These include writing, editing and validating transactions, format, and content.

In addition, she said, “We review ICD-9 codes versus ICD-10 codes based on date of service, check the validity of I-10 codes for structure and appropriate alphanumeric codes, and identify data content that failed payer edits. We also facilitate clean content for every data point before it goes to payers.”

On an ongoing basis, clearinghouses also gather data and identify trends. In fact, McMullin reports that his association is now conducting an online confidential payer survey (www.cooperativeexchange.org) where users, which include clearinghouses, can rate health plans. In addition to clearinghouses, he encourages others to complete the survey, including billing companies, direct submitters of claims, practice management organizations, employers, and consumers.

The survey is “an opportunity to tell your health plans how they are really doing and how they can improve their service,” he said. “This is important because some of the survey questions relate to the 5010 and how the health plan did implementing it. Of course, the health plan’s success with the 5010 might or might not indicate how they’re going to do with I-10 implementation, but the resulting data will be used as a benchmark.” In fact, payers can use the data submitted in the survey as their benchmarks for improvement.

It is an industry-wide view such as this that makes clearinghouses valuable. “Because clearinghouses are testing with many providers to one payer, they see the big picture, which is a real advantage,” McMullin stated.

Another guest on the broadcast—Angela Kennedy, board president and chair of the American Health Information Management Association (AHIMA)—also mentioned the big picture and identified ICD-10 data-gathering as an important step to progress in many areas of the healthcare system.

“It will allow more effective use of data in the electronic health record [EHR] and allow us to more closely analyze trends to improve public health,” Kennedy said. “It’s a great time for this as EHR adoption expands as a part of meaningful use. As we get closer to the deadline, it’s also important for us to look at the bigger picture, and understand the importance of information governance.”

Farahmand echoes the observations thatclearinghouses play an important role in collecting data and identifying trends, saying that they “possessaplethora of information and knowledge” about ICD-10 readiness of payers. They know whether providers are I-10 and 5010 compliant. “Packaging this type of data for transformational initiatives such as the launch of ICD-10 is critical.”

Disclaimer: Every reasonable effort was made to ensure the accuracy of this information at the time it was published. However, due to the nature of industry changes over time we cannot guarantee its validity after the year it was published.
Janis Oppelt

Janis keeps the wheel of words rolling for Panacea®'s publishing division. Her roles include researching, writing, and editing newsletters, special reports, and articles for RACMonitor.com and ICD10Monitor.com; coordinating the compliance question of the week; and contributing to the annual book-update process. She has 20 years of experience in topics related to Medicare regulations and compliance.