Medical Billing & RCM Glossary

The payer’s statement explaining how a claim was processed — what was allowed, paid, adjusted, and left to the patient.

The electronic remittance file a payer sends so payments and adjustments can be posted automatically to claims.

The reason and remark codes that explain every adjustment on a remittance.

The difference between the billed charge and the contracted allowed amount — written off, not collected.

The maximum a payer recognizes for a service — the basis for payment and patient share.

The list of allowed amounts a payer will pay for each service.

A payer paying less than the contracted allowed amount for a claim.

A payer taking back money it already paid, often by offsetting future payments.

A payer’s advance approval that a service is covered — required for many procedures before they are performed.

Confirming a patient’s active coverage and benefits before the visit — the first line of defense against denials.

An itemized encounter form listing the services, codes, and diagnoses used to generate a claim.

A two-character code appended to a CPT/HCPCS code to add necessary detail without changing the code’s meaning.

Flags a significant, separately identifiable E/M service performed on the same day as a procedure.

A two-digit code on the claim that tells the payer where the service was delivered.

The five-character code that says what service or procedure was performed.

Codes for supplies, drugs, equipment, and services that CPT alone does not cover.

The diagnosis code set that explains why a service was medically necessary.

The requirement that a service be appropriate and needed for the patient’s condition.

CMS code-pair rules that stop improper unbundling and impossible unit counts.

Signals a distinct procedural service so two normally-bundled codes can both be paid.

Billing a higher-level or more expensive code than the documentation supports.

Billing a lower-level code than the work supports — or a payer reducing the code billed.

Coding office and other visits by level, based on medical decision-making or time.

A window after a procedure when related follow-up care is bundled into the original payment.

The unique 10-digit identifier for a healthcare provider or organization used on claims and transactions.

Verifying a provider’s qualifications and enrolling them with payers so services can be billed in network.

The average number of days it takes a practice to collect payment after a service is billed.

An intermediary that checks, formats, and routes claims between providers and payers.

A claim bounced for a data or format error before it is ever processed.

The payer’s deadline to submit a claim after the date of service.

The standard claim format for professional (physician and outpatient) services.

The standard claim format for facility (institutional) services such as hospitals.

A resubmission that replaces an already-processed claim to fix an error.

The rules that decide which plan pays first when a patient has more than one.

Automated checks that catch errors before a claim is sent to the payer.

The amount a patient pays out of pocket before their plan starts to share costs.