ECS 101:
Everything you ever wanted to know about
Electronic Claims.

If you work in a medical office, you are sure to have heard about electronic claims. With the rise of technology comes an entirely new set of terms; terms that can be hard to get a handle on when you're busy enough worrying about receiving payments. Before you consider the possibility of taking your claims submission to a new level, familiarize yourself with the terminology below.


  • CLEARINGHOUSE: A means of electronic communication between a provider and a payer. A clearinghouse recieves claims and other data from providers via a generated computer file, and proof-reads the information. It then translates the claim file into HIPPA* compliant format, batches the claims by the Payer's ID number, and sends the claims to the proper recipients. The payer will also use the clearinghouse to send reports back to the submitting provider's computer. Providers can submit almost all of their claims directly to a clearinghouse, without using a single stamp.
  • ELECTRONIC CLAIM: The submission of claims through a billing software system, or a web-site. These claims are completely paperless, and travel in file format from your computer into a clearinghouse.
  • ELECTRONIC CLAIMS SUBMISSION (ECS): Transmitting claims for a request for payment from a practice to a payer. The Healthcare Provider transmits claims to their clearinghouse, the clearinghouse reformats the data and transmits the claims on to the payers.
  • ELECTRONIC DATA INTERCHANGE (EDI): EDI is pretty much what it sounds like; The interchange of data (claims, for instance) from computer to computer.
  • *HIPPA (HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996): The United States Department of Health and Human Services (DHHS) was required to develop standards for maintaining and transmitting health information in a private, secure and simple format. Clearinghouses process claims using these HIPAA standards.
  • MODEM: A communications device that sends information over a telephone line by converting a computer's digital signals into transferable analog signals.
  • PAYER: A payer is an insurance carrier (or benefits carrier). Examples of payers are Blue Cross Blue Shield, Harvard Pilgrim Health Care, and Medicare. Some Payers have more than one branch; a seperate branch per state, for example.
  • PAYER ID: Every payer has a numeric code, used much like an address, to route electronic claims to their proper destination.
  • PROVIDER: A provider is a general term used for one doctor, or a group of doctors. In a practice, the rendering provider is the doctor who performed the services. The billing provider is the doctor who receives payment.
  • PROVIDER ID: Some payers distribute a unique numeric code to each participating provider for identification purposes.

Now that you are acquainted with the lingo, you are ready to discover how all of this can be of help to you and your office. Return to The PDC Clearinghouse Page.