Healthcare RCM
Glossary

Accounts Receivable (AR) represents the outstanding balance of money owed to a healthcare practice for services already rendered but not yet…

Accounts Receivable Aging Report is a core RCM report that categorizes unpaid patient and payer balances by how long they have been…

Allowed Amount refers to the maximum a payer will reimburse for a covered service under a contract or fee schedule. It is the basis for…

Appeal Success Rate is the percentage of denied claims that are overturned and paid after an appeal. It is typically calculated as…

AR Days measures the average number of days it takes a healthcare organization to collect payment after a service is rendered. It is…

Bad Debt refers to patient or payer balances deemed uncollectible after reasonable internal and external collection efforts, which are then…

Balance Billing refers to charging a patient the difference between a provider’s billed charge and the payer’s allowed amount after a claim…

Charge Capture is the process of accurately recording all billable services, procedures, and supplies provided to a patient so they flow to…

Charge Master (CDM) is the centralized catalog of billable services, supplies, codes (e.g., CPT/HCPCS, revenue codes), modifiers, and prices…

Claim Adjudication is the payer’s process of evaluating a submitted claim against eligibility, coverage, coding edits, and contract terms to…

A claim denial occurs when an insurance payer refuses to honor a submitted claim for payment, either in whole or in part. Denials can be…

Claim scrubbing is the process of reviewing and validating insurance claims for errors, omissions, and payer-specific requirements before…

A clean claim is a submitted insurance claim that contains all required data elements, is free of errors, and can be processed without the…

Clean Claim Rate is the percentage of claims accepted and adjudicated by payers without front-end rejection, manual correction, or…

Contracted Rate is the negotiated in-network allowed amount a payer agrees to reimburse a provider for a specific service, before patient…

Coordination of Benefits (COB) is the process of determining which insurance plan pays first (primary) and which pays second (secondary)…

Days Sales Outstanding (DSO) measures the average number of days it takes to collect revenue after a sale or service has been completed. In…

Denial Rate is the percentage of claims rejected or denied by payers during adjudication, typically measured on first submission. It is…

Electronic Remittance Advice (ERA) is the ANSI X12 835 transaction that details how a payer adjudicated claims, including paid amounts,…

Eligibility verification is the process of confirming a patient's active insurance coverage, benefits, and plan details before or at the…

An Electronic Remittance Advice (ERA) is the electronic version of an Explanation of Benefits (EOB) sent from a payer to a provider…

Fee Schedule refers to the payer- or provider-defined list of allowed reimbursement amounts for specific procedure codes (e.g., CPT/HCPCS or…

First-pass resolution rate (also called first-pass yield or first-pass acceptance rate) measures the percentage of claims that are paid on…

Healthcare Clearinghouse refers to a HIPAA-defined intermediary that translates, edits, and routes healthcare transactions between providers…

Net collection rate measures the percentage of allowable charges that a healthcare organization actually collects. It is calculated by…

Patient Access refers to the front-end processes that connect patients to care and financially clear them, including scheduling,…

Patient Responsibility is the portion of a healthcare bill the patient owes after payer adjudication, including deductibles, copays,…

Payer Mix is the distribution of an organization’s patient volume or net revenue across payer categories such as commercial,…

Payment posting is the process of recording insurance and patient payments to their corresponding accounts and claims in a practice…

Preauthorization vs. Predetermination refers to two different payer processes used before care is delivered. Preauthorization (prior…

Prior authorization (also called pre-authorization or pre-cert) is the process of obtaining approval from an insurance payer before…

RCM Key Performance Indicators (KPIs) refers to the measurable metrics used to assess the financial and operational health of the revenue…

Revenue Cycle Management (RCM) encompasses all administrative and clinical functions that contribute to the capture, management, and…

Self-Pay refers to amounts a patient owes directly, either because they are uninsured or because insurance left a residual balance…

Superbill refers to an itemized encounter document that captures services rendered, diagnosis and procedure codes, modifiers, provider…

Timely Filing Limit is the payer-defined deadline for submitting a claim to be eligible for payment. Limits vary by payer and plan (often…

Underpayment Recovery is the process of identifying and recouping payer reimbursements that fall below contracted allowed amounts or…

A write-off in healthcare billing is the portion of a charge that a provider removes from a patient's account balance. Write-offs can be…

Clinical Documentation Improvement (CDI) is a discipline that ensures provider documentation accurately reflects the patient’s severity of…

CPT codes are a standardized medical code set maintained by the American Medical Association (AMA) used to describe medical, surgical, and…

Credentialing is the process of verifying a healthcare provider's qualifications, including education, training, licensure, certifications,…

An Explanation of Benefits (EOB) is a document sent by an insurance payer to both the provider and the patient that details how a medical…

ICD-10 is the international standard diagnostic classification system used to code and classify diseases, symptoms, abnormal findings, and…

Medical Billing vs. Medical Coding refers to two connected but distinct functions in the revenue cycle. Coding translates clinical…

Medical necessity is the standard used by insurance payers to determine whether a healthcare service, procedure, or treatment is clinically…

Modifier (CPT Modifier) is a two-digit numeric suffix appended to a CPT code to indicate that a service or procedure has been altered…

National Provider Identifier (NPI) is a unique 10-digit identifier assigned by CMS through NPPES to healthcare providers and organizations…

Remittance advice is a document accompanying a payment from an insurance payer that provides a detailed breakdown of how claims were…

Revenue Integrity refers to the end-to-end controls that ensure charges, coding, billing, and reimbursement accurately reflect the care…

Value-Based Care is a set of reimbursement models that tie payment to quality, outcomes, and cost-efficiency rather than volume alone.…