A comprehensive reference of medical billing terminology used by healthcare practices, billing companies, and revenue cycle management professionals. Each term includes a plain-language definition designed for practice managers, office administrators, and billing specialists.
A standardized set of medical codes maintained by the American Medical Association (AMA) used to report medical, surgical, and diagnostic procedures and services. CPT codes are required on every insurance claim and are the primary way providers communicate what services were performed.
The International Classification of Diseases, 10th Revision, is the diagnostic coding system used globally. ICD-10-CM (Clinical Modification) codes describe patient diagnoses and are required alongside CPT codes on every insurance claim to justify medical necessity.
The end-to-end financial process that healthcare organizations use to track patient care episodes from registration and appointment scheduling through final payment. RCM encompasses charge capture, claim submission, payment posting, denial management, and patient collections.
A decision by a health insurance payer to refuse payment for a submitted claim. Common denial reasons include coding errors, lack of prior authorization, missing information, timely filing violations, and medical necessity disputes. The average healthcare claim denial rate is 5-10%.
A claim submitted to a payer with no errors, omissions, or missing information that would cause it to be rejected or denied. Clean claim rates above 95% are considered excellent and directly impact revenue cycle efficiency.
An electronic document sent by a payer to a provider that explains how a claim was adjudicated, including payment amounts, adjustments, and denial reasons. ERAs replaced paper Explanation of Benefits (EOB) statements for electronic processing.
A statement from a health insurance payer explaining what was covered, what the payer paid, what the patient owes, and why certain charges were adjusted or denied. EOBs are sent to both the provider and the patient.
A requirement by health insurance payers that providers obtain approval before performing certain procedures, prescribing certain medications, or providing certain services. Failure to obtain prior authorization typically results in claim denial.
The systematic process of identifying, analyzing, appealing, and preventing claim denials. Effective denial management involves tracking denial patterns by payer and reason code, filing timely appeals, and implementing process changes to prevent recurring denials.
The process of translating medical documentation (physician notes, lab results, radiology reports) into standardized alphanumeric codes (CPT, ICD-10, HCPCS) for billing purposes. Accurate coding is essential for proper reimbursement and compliance.
A standardized coding system used to identify products, supplies, and services not included in CPT codes, such as durable medical equipment (DME), prosthetics, orthotics, ambulance services, and certain drugs.
The process of recording all billable services, procedures, and supplies provided to a patient. Incomplete charge capture is one of the leading causes of revenue leakage in healthcare, with estimates suggesting practices miss 1-5% of charges.
The administrative process of registering new patients, collecting demographic and insurance information, verifying eligibility, obtaining consent forms, and entering data into the practice management system or EHR.
The process of confirming a patient's insurance coverage, benefits, copay amounts, deductible status, and authorization requirements before services are rendered. Verification prevents claim denials due to coverage issues.
The process of recording payments received from insurance payers and patients into the practice management system, reconciling payments against claims, identifying underpayments, and applying adjustments.
The total amount of money owed to a healthcare practice by payers and patients for services already rendered. A/R aging reports track how long claims have been outstanding, with best-practice targets of less than 30 days average.
A two-character code appended to a CPT code to provide additional information about the service performed, such as whether it was bilateral, reduced, or performed by a different provider. Common modifiers include -25 (significant, separately identifiable E/M service) and -59 (distinct procedural service).
A pre-formatted form used in medical offices that lists commonly performed services with their CPT and ICD-10 codes. Providers check off services rendered and diagnoses, which billers then use to create insurance claims.
The process of verifying a healthcare provider's qualifications, including education, training, licensure, certifications, and malpractice history, and enrolling them with insurance payers so they can bill and receive reimbursement.
A trained professional who documents patient encounters in real-time, entering clinical information into the EHR while the physician focuses on patient care. Scribes handle documentation of history of present illness, physical exams, assessments, and plans.
A digital version of a patient's medical chart that contains their complete medical history, diagnoses, medications, treatment plans, immunization dates, allergies, radiology images, and laboratory results. Major EHR systems include Epic, Cerner, athenahealth, eClinicalWorks, and NextGen.
Software used by medical practices to manage day-to-day operations including scheduling, billing, claims processing, reporting, and patient registration. Many PMS systems integrate with or are part of EHR platforms.
The deadline by which a provider must submit a claim to an insurance payer. Timely filing limits vary by payer (typically 90-365 days from date of service) and missing the deadline results in automatic denial with no appeal rights.
An amount removed from a patient's account balance that the practice agrees not to collect. Write-offs can be contractual (required by insurance contracts), bad debt (uncollectible patient balances), or administrative (billing errors).
The process of determining which insurance plan pays first (primary) and which pays second (secondary) when a patient has coverage under multiple insurance plans. Incorrect COB is a common cause of claim denials.
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