Healthcare revenue cycle glossary
Medical Billing & Revenue Cycle Glossary
Plain-language definitions of the billing, coding and claims terms practices see every day, with examples.
All terms A to Z
C
- Claim Adjustment Reason Code (CARC) A claim adjustment reason code is a standard code on a remittance that explains why a claim or service line was paid differently from how it was billed. Abbreviation: CARC
- Claim Denial A claim denial is a payer’s decision, after processing a claim, not to pay all or part of it, explained on the remittance by a claim adjustment reason code.
- Clean Claim Rate The clean claim rate is the share of claims that pass through clearinghouse and payer checks on first submission without needing to be corrected. Abbreviation: CCR
- CMS-1500 The CMS-1500 is the standard paper claim form for professional services billed by physicians and other practitioners; its electronic equivalent is the 837P.
- Coordination of Benefits (COB) Coordination of benefits is the set of rules that decides which health plan pays first when a patient is covered by more than one plan, and how much each pays. Abbreviation: COB
- Credentialing and Payer Enrollment Credentialing is the verification of a provider’s qualifications, and payer enrollment is the process of becoming a participating provider who can bill a health plan.
- Current Procedural Terminology (CPT) CPT is the code set, maintained by the American Medical Association, used to report medical, surgical and diagnostic procedures and services on claims. Abbreviation: CPT
E
- Electronic Claim (EDI 837) The 837 is the standard electronic claim transaction: 837P for professional claims, 837I for institutional claims and 837D for dental claims. Abbreviation: 837
- Electronic Remittance Advice (ERA, 835) An electronic remittance advice is the standard 835 transaction a payer sends to explain what it paid, adjusted or denied on each claim and service line. Abbreviation: ERA
- Evaluation and Management (E/M) Evaluation and management codes are the CPT codes used to report visits and other services in which a clinician assesses and manages a patient’s health. Abbreviation: E/M
M
- Medical Necessity Medical necessity is the standard payers use to decide whether a service was reasonable and needed to diagnose or treat a patient’s condition, and therefore whether it is covered.
- Modifier A modifier is a two-character code added to a CPT or HCPCS code to show that a service was altered by a specific circumstance without changing its definition.
N
- National Correct Coding Initiative (NCCI) The National Correct Coding Initiative is the CMS program of coding edits that prevent code pairs that should not be billed together, and excessive units, from being paid. Abbreviation: NCCI
- Net Collection Rate The net collection rate is the share of collectible revenue a practice actually collects: payments divided by charges minus contractual adjustments. Abbreviation: NCR
R
- Remittance Advice Remark Code (RARC) A remittance advice remark code is a supplemental code on a remittance that adds detail to a claim adjustment, such as which data element was missing. Abbreviation: RARC
- Revenue Cycle Management (RCM) Revenue cycle management is the set of administrative and clinical processes a healthcare organization uses to capture, bill and collect payment for patient services, from scheduling to the final payment. Abbreviation: RCM
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