Revenue Cycle Management glossary

Plain-English definitions of the RCM, coding and billing terms that run your revenue cycle.

A/R Aging

A breakdown of outstanding receivables by how long they've been unpaid (e.g., 0–30, 31–60, 61–90, 90+ days).

Appeal

A formal request asking a payer to reconsider a denied or underpaid claim.

Bad Debt

Patient balances a practice ultimately can't collect and writes off as a loss.

Charge Capture

Recording the billable services a provider performed so they can be coded and billed.

Claim Scrubbing

Automatically checking a claim against payer and coding rules to catch errors before it's submitted.

Clean Claim

A claim that's complete and accurate enough to be accepted and paid by the payer on the first submission, without a rejection or denial.

Clearinghouse

An intermediary that receives claims from providers, checks and formats them, and routes them to the correct payers.

Copay, Deductible & Coinsurance

The three forms of patient cost-sharing: a flat fee per visit (copay), an amount paid before coverage kicks in (deductible), and a percentage of costs after that (coinsurance).

CPT Code

A standardized code that identifies the medical procedures and services a provider performed, for billing.

Credentialing

Verifying a provider's qualifications so they can be approved to deliver and bill for care.

Days in A/R

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

Denial Management

The process of categorizing, working and preventing insurance claim denials to recover revenue.

DNFB (Discharged Not Final Billed)

The dollar value of completed encounters that have been discharged but not yet finalized and billed - usually because they're waiting to be coded.

Eligibility Verification

Confirming a patient's active insurance coverage and benefits before a visit, so claims don't bounce for inactive or changed coverage.

Fee Schedule

The list of contracted rates a payer agrees to pay a provider for each service.

Gross Collection Rate

Total payments divided by total charges - a rough measure heavily influenced by how charges are set.

HCPCS Code

A code set used mainly for products, supplies and services not covered by CPT - such as drugs, durable medical equipment and some procedures.

ICD-10 Code

A standardized diagnosis code that describes a patient's condition - the 'why' behind a billed service.

Medical Necessity

The requirement that a billed service be appropriate and necessary for the patient's diagnosis, per payer rules.

Modifier

A two-character code appended to a CPT/HCPCS code to add detail - such as that a service was distinct, bilateral, or reduced.

Net Collection Rate

The percentage of collectible revenue a practice actually collects, after contractual adjustments.

Patient Responsibility

The portion of a bill the patient owes - copays, deductibles and coinsurance - after insurance pays its share.

Payer Enrollment

Registering a credentialed provider with a payer so their claims can be processed and paid.

Payment Posting

Recording payer and patient payments against claims and reconciling them line by line.

Prior Authorization

A payer's requirement that a service be approved in advance before it's performed, or the claim will be denied.

Revenue Cycle Management (RCM)

The end-to-end financial process a healthcare practice uses to capture, manage and collect revenue for the care it delivers.

Timely Filing

The deadline by which a claim must be submitted to a payer to be eligible for payment.

Underpayment

When a payer reimburses less than the contracted rate for a service.

Write-Off

An amount a provider removes from a patient's balance because it won't be collected - either contractually agreed or deemed uncollectible.