RCM & Medical Billing Glossary

The end-to-end process of managing a healthcare practice's finances, from patient registration and eligibility through coding, claim submission, payment posting, denial management, and collections.

A claim submitted without errors that passes payer edits and is paid on the first submission, with no need for correction or additional information.

The percentage of claims accepted and paid on first submission. A higher rate means faster payment and less rework; it is a core RCM health metric.

An automated and manual review of claims before submission to catch coding, formatting, and data errors that would otherwise cause rejections or denials.

A claim the payer has processed and decided not to pay. Denials usually require a corrected claim or a formal appeal to recover payment.

A claim stopped before adjudication due to a format or data error at the clearinghouse or payer. It never enters processing and can be corrected and resubmitted.

A statement from the payer describing what was covered, paid, adjusted, and owed on a claim. The electronic equivalent is the ERA.

The electronic version of an EOB (EDI 835) used to post payments and adjustments automatically.

Confirming a patient's active coverage and benefits before a service to prevent downstream denials.

Approval a payer requires before certain services or medications; performing the service without it typically results in denial.

Current Procedural Terminology codes that describe the medical procedures and services performed.

Healthcare Common Procedure Coding System codes, used for products, supplies, drugs, and services not covered by CPT.

The diagnosis coding system that documents why a service was performed and supports medical necessity.

A two-character code appended to a CPT/HCPCS code to add detail, for example the professional (26) or technical (TC) component, or a distinct service.

Recording the coded services and their charges into the billing system so a claim can be created.

Applying payer and patient payments and adjustments to the correct accounts, and reconciling them against the ERA/EOB.

The money owed to a practice for services already provided but not yet paid.

The average number of days it takes to collect payment. Lower is better; rising A/R days signal collection problems.

The percentage of collectible revenue actually collected, after contractual adjustments. It measures how effectively a practice captures what it is owed.

The percentage of claims denied by payers. A rising denial rate points to front-end or coding problems that need attention.

The rules that determine which payer is primary when a patient has more than one insurance plan.

The deadline by which a claim must be submitted to a payer. Missing it usually makes the claim unrecoverable.

An itemized form listing the services and codes from a visit, used to generate a claim.

Standard electronic formats: the 837 is the claim sent to the payer; the 835 is the remittance (payment/adjustment) returned.

An amount removed from a patient's balance, either a contractual adjustment agreed with the payer or uncollectible revenue.

The process of enrolling and verifying a provider with payers so services can be billed and reimbursed.

A set number of days after a procedure during which related follow-up care is included in the surgical payment and not billed separately.