Healthcare RCM
Glossary

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

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…

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…

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…

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…

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…

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

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