Understanding billing terminology is essential for healthcare providers. This glossary covers common terms used in medical billing and revenue cycle management.
Accounts Receivable (AR)Money owed to a healthcare provider for services rendered but not yet paid. Categorized by age (0-30, 31-60, 61-90, 90+ days).AdjudicationThe process by which an insurance company reviews and processes a claim to determine payment.Allowed AmountThe maximum amount an insurance plan will pay for a covered service. Also called the eligible expense or negotiated rate.AppealA formal request to an insurance company to reconsider a denied claim or coverage decision.Authorization (Prior Authorization)Approval from an insurance company required before certain services are provided to ensure coverage.Balance BillingBilling a patient for the difference between the provider's charge and the insurance allowed amount. Often prohibited for in-network services.CAQH ProViewUniversal credentialing database used by most insurance companies to streamline provider enrollment.Charge CaptureThe process of recording all billable services provided during a patient encounter.Clean ClaimA claim submitted without errors that can be processed and paid without additional information.CMS-1500Standard paper claim form used by non-institutional healthcare providers to bill insurance.CoinsuranceThe percentage of costs a patient pays for covered services after meeting their deductible.Copay (Copayment)A fixed amount paid by a patient at the time of service for covered healthcare services.CPT CodeCurrent Procedural Terminology codes used to describe medical, surgical, and diagnostic services.CredentialingThe process of verifying a healthcare provider's qualifications, licenses, and credentials with insurance companies.DeductibleThe amount a patient must pay out-of-pocket before insurance begins covering costs.DenialA claim that has been processed but rejected for payment by the insurance company.E/M CodesEvaluation and Management codes used to bill for office visits and consultations (99201-99499).EOB (Explanation of Benefits)A statement from an insurance company explaining what was paid, denied, or applied to patient responsibility.ERA (Electronic Remittance Advice)Electronic version of an EOB sent to providers for automatic payment posting.Fee ScheduleA list of fees for services that a provider charges or that an insurance company will pay.HCPCS CodesHealthcare Common Procedure Coding System codes used for supplies, equipment, and services not covered by CPT.HIPAAHealth Insurance Portability and Accountability Act, federal law protecting patient health information.ICD-10 CodesInternational Classification of Diseases codes used to document diagnoses and medical conditions.In-NetworkProviders who have contracted with an insurance company to provide services at negotiated rates.Medical NecessityServices that are appropriate and needed for the diagnosis or treatment of a medical condition.ModifierTwo-digit codes added to CPT codes to provide additional information about a procedure or service.NPI (National Provider Identifier)Unique 10-digit identification number required for all healthcare providers.Out-of-NetworkProviders who do not have a contract with a patient's insurance company.Out-of-Pocket MaximumThe maximum amount a patient pays during a plan year before insurance covers 100% of costs.Patient ResponsibilityThe portion of healthcare costs that a patient is responsible for paying (copays, deductibles, coinsurance).PayerAn organization (insurance company, government program) that pays for healthcare services.Pre-certificationAdvance approval from an insurance company that a specific service or treatment will be covered.Provider EnrollmentThe process of becoming enrolled with insurance payers to bill for services.RCM (Revenue Cycle Management)All administrative and clinical functions that contribute to capturing and collecting patient service revenue.RejectionA claim that is returned before processing due to errors or missing information.Remittance AdviceA document from a payer showing how claims were processed and amounts paid or denied.SuperbillAn itemized form used to document services provided during a patient visit for billing purposes.Timely FilingThe deadline by which claims must be submitted to insurance companies (varies by payer, typically 90-365 days).Write-offThe portion of a charge that a provider agrees not to collect, either contractually or due to uncollectibility.