> ## Documentation Index
> Fetch the complete documentation index at: https://mso.getlemma.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Clearinghouse vs RCM vs EHR (vs biller)

> Four things that get conflated constantly: where data lives, what carries it, who operates the workflow, and who you outsource it to, plus a 'who do I call when X breaks' table.

**EHR/PM** is where clinical and billing data lives. A **clearinghouse** is the pipe that carries claims to payers and remittances back. A **biller** is the person who operates the workflow. An **RCM company** is an outsourced team of billers, sometimes with its own software. These are four different things, and buying one to fix a problem in another is the most expensive mistake in healthcare operations.

## The layers

```mermaid theme={null}
graph TB
    subgraph "Layer 1, System of record"
    A[EHR / PM<br/>clinical notes, demographics, insurance,<br/>charges, patient ledger, claim status]
    end
    subgraph "Layer 2, Transport"
    B[Clearinghouse<br/>translate · scrub · route ·<br/>acknowledge · aggregate 835s]
    end
    subgraph "Layer 3, Labor"
    C[Biller<br/>in-house employee]
    D[RCM company<br/>outsourced team]
    end
    A <--> B
    B <--> E[Payers]
    C -.operates.-> A
    C -.operates.-> B
    D -.operates.-> A
    D -.operates.-> B
```

|                   | What it is                        | You buy it as                                | Fails when                                                         |
| ----------------- | --------------------------------- | -------------------------------------------- | ------------------------------------------------------------------ |
| **EHR / PM**      | Software: the system of record    | Subscription, usually per provider per month | Data is wrong, workflows are missing, reporting is unusable        |
| **Clearinghouse** | Connectivity: the transport layer | Per transaction, or bundled into the EHR     | Claims don't reach payers; 835s don't come back; enrollment stalls |
| **Biller**        | A person doing the work           | Salary                                       | Nobody works the denial queue                                      |
| **RCM company**   | Outsourced billers                | Percentage of collections                    | You lose visibility and control                                    |

## Where the confusion comes from

The categories genuinely overlap in the market:

**EHRs with embedded clearinghouses.** Many EHRs bundle one and present it as a single product. Convenient, and it removes your choice, including your ability to leave.

**RCM companies that resell clearinghouses.** Your RCM vendor may route through a clearinghouse you never chose and cannot see.

**Clearinghouses selling "RCM tools."** Denial analytics, worklists, and dashboards, which look like RCM but are software, not labor.

**EHRs selling "RCM services."** The software vendor also sells you the humans. One throat to choke, and also one vendor holding your data, your pipe, and your operations.

**"Full-service" platforms.** EHR plus clearinghouse plus billing plus payments plus payroll. See [When platforms bundle payroll and card processing](/concepts/banking/bundled-payroll-and-processing) for the tradeoffs.

## Who do I call when X breaks

The most practically useful table on this page.

| Symptom                            | Layer                    | Call                                                        |
| ---------------------------------- | ------------------------ | ----------------------------------------------------------- |
| Claim never reached the payer      | Clearinghouse            | Clearinghouse support                                       |
| 999 rejection, malformed file      | Clearinghouse / EHR      | Clearinghouse first; EHR if the data is wrong at source     |
| 277CA rejection, payer front-end   | Data                     | Whoever owns the data: EHR config or enrollment             |
| "Payer ID not found"               | Clearinghouse            | Clearinghouse, payer IDs are theirs                         |
| 835s not arriving                  | ERA enrollment           | Clearinghouse, then the payer                               |
| Payment arrived, no 835            | ERA enrollment misrouted | Payer, ERA and EFT are separate enrollments                 |
| 835s arriving but not auto-posting | EHR                      | EHR support, this is posting configuration                  |
| Denials rising                     | Workflow                 | Biller or RCM, this is a process problem, not software      |
| Days in AR rising                  | Workflow                 | Biller or RCM                                               |
| Can't produce a denial report      | EHR reporting            | EHR, or export and analyze elsewhere                        |
| Provider not recognized by payer   | Enrollment               | Payer enrollment, not any vendor                            |
| Eligibility check returns nothing  | Clearinghouse            | Clearinghouse; confirm the payer supports real-time 270/271 |

**Two rows deserve emphasis because they are misdiagnosed constantly.**

"Denials are rising" is almost never a software problem, and buying a new EHR will not fix it. It is an eligibility, authorization, coding, or enrollment process problem.

"Provider not recognized" is an enrollment problem. No vendor can fix it, because the missing thing is a relationship with the payer. See [Set up EDI, ERA, and EFT](/guides/enrollment/set-up-edi-era-eft).

## Coder vs biller

A related distinction that matters for MSO-PC compliance:

|                     | Coder                                         | Biller                                      |
| ------------------- | --------------------------------------------- | ------------------------------------------- |
| **Job**             | Translate documentation into CPT/HCPCS/ICD-10 | Get claims out, payments in, denials worked |
| **Credential**      | CPC, CCS                                      | CPB                                         |
| **Judgment**        | Clinical, what was done and why               | Operational, process and payer rules        |
| **In MSO-PC terms** | Coding is a **PC** responsibility             | Billers are typically **MSO** employees     |

In small practices one person does both, and the clinician codes their own encounters. That is fine, but the MSA should still be clear that **coding responsibility rests with the PC**, because California's SB 351 and Oregon's SB 951 both name coding among the functions a management entity may not control.<sup>1</sup> See [What an MSO can and can't do](/concepts/model/what-msos-can-and-cant-do).

## Choosing at each layer

**EHR/PM**, pick on specialty fit, data export rights, ERA auto-posting quality, and whether it permits your choice of clearinghouse. See [Choose an EHR/PM system](/guides/billing/choose-an-ehr).

**Clearinghouse**, pick on payer coverage for *your* mix, enrollment support quality, rejection reporting clarity, and API access if you plan to build your own tooling. The tradeoffs across incumbents and API-first entrants are in [The clearinghouses, compared](/reference/vendors/clearinghouse-comparison).

**Labor**, in-house below roughly two full-time clinicians is usually more expensive than an outsourced service; above that, in-house buys visibility. See [In-house billing vs outsourced RCM](/guides/billing/in-house-vs-outsourced-billing).

## The bundling question

Buying all layers from one vendor is simpler. It also means:

* **You cannot swap a weak layer.** A great EHR with a poor clearinghouse is a package deal.
* **Pricing is opaque.** Bundled pricing hides which component costs what.
* **Switching costs compound.** Leaving means replacing everything at once.
* **Your data may not be portable.** Read the export terms before signing.

For a single-location practice, bundling is often the right call. For a multi-entity MSO-PC group that will operate across states and wants its own analytics, unbundling the clearinghouse specifically tends to pay for itself.

## Sources

1. Cal. S.B. 351 (2025); Or. S.B. 951 (2025). See the [legislation tracker](/reference/legal/cpom-legislation-tracker).


## Related topics

- [What is a clearinghouse?](/concepts/payments/what-is-a-clearinghouse.md)
- [What billers actually do](/concepts/payments/what-billers-do.md)
- [Choose an EHR/PM system](/guides/billing/choose-an-ehr.md)
- [Choose a clearinghouse](/guides/billing/choose-a-clearinghouse.md)
- [Decide: in-house billing vs outsourced RCM](/guides/billing/in-house-vs-outsourced-billing.md)
- [The clearinghouses, compared](/reference/vendors/clearinghouse-comparison.md)
- [EHR/PM directory by segment](/reference/vendors/ehr-directory.md)
- [RCM & billing service directory](/reference/vendors/rcm-directory.md)