RCM Glossary

A/R days measures how long, on average, it takes a practice to collect payment after a service is billed. Formula: tota…

An aging report breaks outstanding receivables into time buckets — 0–30, 31–60, 61–90, 91–120, and 120+ days — by payer…

The allowed amount is the maximum a payer will recognize for a covered service under its fee schedule or contract — the…

Assignment of benefits (AOB) is the patient's written authorization directing their insurer to pay the provider directl…

Capitation is a payment model where a provider receives a fixed per-member-per-month (PMPM) amount for each assigned pa…

Charge capture is the process of recording every billable service a provider performs and converting it into a charge o…

A chargemaster (charge description master, CDM) is the master price list of every billable service, supply, and drug in…

Claim scrubbing is the automated review of claims against payer, coding, and format rules before submission, catching e…

A clean claim is a medical claim that passes payer edits and is paid on first submission — no errors, no missing data, …

Coinsurance is the percentage of the allowed amount a patient owes after meeting their deductible — commonly 20% on com…

A contractual adjustment is the difference between your billed charge and the payer's contracted allowed amount, writte…

The Medicare conversion factor is the dollar multiplier that turns a code's total relative value units into a payment a…

Coordination of benefits (COB) is the process of determining which insurance pays first when a patient has more than on…

A copay is a fixed dollar amount a patient pays for a covered service — for example $30 for an office visit or $75 for …

A deductible is the amount a patient must pay out of pocket for covered services each plan year before insurance begins…

Denial rate is the percentage of submitted claims a payer denies on initial adjudication. National averages have climbe…

Downcoding is billing (or being paid at) a lower code level than the documented service supports. Providers downcode de…

An electronic remittance advice (ERA) is the HIPAA-standard X12 835 transaction payers send providers to explain claim …

An ERA and an EOB describe the same claim adjudication in two formats for two audiences: the ERA is the machine-readabl…

An explanation of benefits (EOB) is the payer's statement — sent to the patient, and in paper workflows to the provider…

A fee schedule is a payer's list of maximum allowed amounts by CPT/HCPCS code — the prices that actually get paid, as o…

First-pass resolution rate (FPRR) is the percentage of claims paid in full on the first submission, with no rework, res…

A global period is the window of time after a surgery during which routine follow-up care is bundled into the surgical …

A guarantor is the person financially responsible for a patient's bill, which is not always the patient. Adults are usu…

An NCD (National Coverage Determination) is CMS's nationwide Medicare coverage policy; an LCD (Local Coverage Determina…

Medical necessity is the payer's standard that a service must be reasonable and necessary to diagnose or treat the pati…

Prior authorization is payer approval obtained before a service is performed, required for many imaging studies, surger…

An insurance referral is the primary care physician's formal authorization for a patient to see a specialist, required …

A remittance advice (RA) is the payer's claim-by-claim explanation of what it paid, adjusted, and denied, sent to the p…

A relative value unit (RVU) is Medicare's standardized measure of the resources a service consumes, split into work, pr…

A superbill is an itemized encounter form listing the provider's details, diagnosis codes, CPT codes, and charges for a…

A timely filing limit is the payer's deadline for submitting a claim, counted from the date of service. Medicare allows…

Unbundling is billing separately for services that a comprehensive code already includes, such as coding an incision cl…

Upcoding is billing a higher-paying code than the documentation and service support, such as reporting a level-5 visit …

A write-off is any portion of a charge removed from accounts receivable without payment. Contractual write-offs are req…