Medical Billing, Coding & RCM Glossary

Categorization of unpaid insurance claims and patient balances into 0–30, 31–60, 61–90, 91–120, and 120+ day buckets measured from date of service or claim submission.

Form CMS-R-131 issued to Original Medicare beneficiaries prior to rendering an item or service that Medicare is expected to deny as not medically reasonable and necessary, enabling valid GA modifier billing.

The maximum dollar reimbursement established by an insurance payer's fee schedule for a covered CPT or HCPCS procedure code, comprising the payer's payment plus patient deductible, copay, or coinsurance.

HIPAA-mandated electronic transaction pair used to transmit real-time patient insurance eligibility inquiries (270) and receive coverage, copay, and remaining deductible benefit responses (271).

Electronic claim status inquiry (276) and response/claim acknowledgment (277CA) transactions used to verify payer gateway acceptance or identify front-end clearinghouse rejections within 24 hours.

Electronic data file sent by payers detailing claim adjudication outcomes, payment amounts, contractual adjustments (CO), patient responsibility (PR), and CARC/RARC denial codes for automated posting.

Standard electronic claim formats replacing paper CMS-1500 professional claims (837P) and UB-04 / CMS-1450 institutional facility claims (837I).

Signed patient authorization directing health insurance carriers to remit reimbursement payments directly to the rendering medical practice or billing group rather than the subscriber.

Legally binding contract required under 45 C.F.R. § 164.504(e) between a HIPAA Covered Entity and third-party RCM, EHR, or clearinghouse vendors defining safeguards for Protected Health Information (PHI).

Centralized online repository used by commercial health plans to verify physician licensure, DEA certificates, malpractice coverage, work history, and quarterly re-attestations during credentialing.

Federal agency within HHS administering Medicare, federal Medicaid oversight, the Physician Fee Schedule (MPFS), NCCI coding edits, and HIPAA administrative simplification standards.

Process of translating documented clinical encounters, procedures, supplies, and modifiers from EHR encounter notes or superbills into billable claim line items.

Two-letter prefixes on 835 remittances assigning financial liability for adjustments: Contractual Obligation (CO), Patient Responsibility (PR), Other Adjustment (OA), and Payer-Initiated Reduction (PI).

Standardized numeric codes explaining why a claim or service line was paid differently than billed—such as CO-16 (missing information), CO-29 (timely filing expired), CO-50 (medical necessity), or CO-97 (bundled).

Automated pre-submission audit validating ICD-10 specificity, CPT-to-diagnosis pointers, NCCI edits, MUE limits, NPI/taxonomy linkages, and payer formatting rules prior to EDI transmission.

Percentage of submitted claims accepted and adjudicated on the first submission without clearinghouse rejection or manual payer rework. Top-performing practices maintain 98%+ CCR.

Federal certification number required in Box 23 / Loop 2300 REF*X4 on claims billing point-of-care waived tests (QW modifier) or moderate/high-complexity diagnostic laboratory assays.

Standard paper claim form developed by the National Uniform Claim Committee (NUCC) for non-institutional physician, NPP, and ambulatory supplier services.

Medicare provider enrollment applications submitted via internet-based PECOS to enroll individual practitioners (855I), clinics/groups (855B), or reassign Medicare benefits to a group TIN (855R).

Rules determining the primary, secondary, and tertiary order of payers when a patient holds dual insurance coverage (e.g., commercial employer plan plus Medicare, or two parental plans under the Birthday Rule).

Five-digit numeric and alphanumeric code set maintained by the American Medical Association (AMA) describing medical, surgical, radiology, pathology, anesthesiology, and E/M services.

Average number of days required to collect payments, calculated as Total Accounts Receivable divided by Average Daily Gross Charges over a 90-day period. Healthy outpatient benchmark: under 30 days.

Category of medical equipment billed using HCPCS Level II codes (A–V codes) to specialized DME Medicare Administrative Contractors (Jurisdictions A, B, C, and D) with KX/NU/RR modifiers.

Automated ACH bank deposit of insurance claim reimbursements directly into a medical group's bank account, reconciled against matching trace numbers in the 835 ERA file.

CPT codes (such as 99202–99215 for office visits) leveled based on either total practitioner time on the date of encounter or Medical Decision Making (MDM) complexity across problems, data, and risk.

Statement sent by an insurer to the patient (and paper remittance equivalent for providers) summarizing billed charges, network discounts, insurer payment, and patient cost-sharing.

CMS and commercial bundling rule combining preoperative evaluation, intraoperative surgical procedure, and normal postoperative follow-up visits (0-day, 10-day, or 90-day global periods) into a single fee.

CMS-maintained alphanumeric code set (starting with letters A through V, such as J-codes for injectable drugs and biologics) identifying supplies, prosthetics, ambulance transport, and non-physician products.

International Classification of Diseases, 10th Revision, Clinical Modification (used for outpatient/physician diagnostic medical necessity) and Procedure Coding System (used for inpatient hospital procedures).

Medicare provision permitting non-physician practitioners (NPs, PAs) to bill follow-up services under a supervising physician's NPI at 100% of the Physician Fee Schedule when an established plan of care and direct supervision exist.

Policies published by regional Medicare Administrative Contractors (LCDs) and CMS nationally (NCDs) specifying exact covered ICD-10 diagnosis codes, frequency limits, and clinical documentation prerequisites for CPT procedures.

AMA framework scoring E/M complexity across three elements—number/complexity of problems addressed, amount/complexity of data reviewed, and risk of complications or morbidity (Straightforward, Low, Moderate, High).

CMS unit-of-service claim edits defining the maximum number of units of a single CPT or HCPCS code that a provider would reasonably report for the same beneficiary on the same date of service.

Private insurer contracted by CMS to process Medicare Part A and Part B claims within a specific geographic jurisdiction (e.g., Novitas JH/JL, Noridian JE/JF, Palmetto GBA JJ/JM, NGS J6/JK, First Coast JN, CGS J15).

CPT modifier appended to an E/M code indicating a significant, separately identifiable evaluation and management service rendered by the same practitioner on the same day as a minor procedure.

Modifiers unbundling NCCI Procedure-to-Procedure code pairs when procedures represent a Separate Encounter (XE), Separate Practitioner (XP), Separate Organ/Structure (XS), or Unusual Non-Overlapping Service (XU).

CMS quarterly edit tables preventing improper payment when mutually exclusive or comprehensive/component CPT codes are billed together without valid clinical justification.

11-digit, 5-4-2 formatted identifier and unit-of-measure (UN, ML, GR, F2) required alongside J-codes on physician-administered drug claims to prevent Medicaid drug rebate and commercial rejections.

Unique 10-digit identifier issued via NPPES: Type 1 NPIs identify individual rendering clinicians, while Type 2 NPIs identify group practices, facilities, and corporate billing entities.

Percentage of contractually collectible reimbursement actually collected: Payments divided by (Gross Charges minus Approved Contractual Adjustments) × 100. Best-in-class RCM exceeds 96%–98%.

Federal law protecting patients from out-of-network emergency/ancillary balance billing and requiring practices to furnish upfront Good Faith Estimates (GFEs) to uninsured or self-pay patients.

Two-digit CMS codes reported on professional claims specifying where care was delivered—such as POS 11 (Office), POS 02/10 (Telehealth), POS 20 (Urgent Care), POS 21 (Inpatient), POS 22 (Outpatient Hospital), and POS 24 (ASC).

Advance clinical approval required by a health plan confirming medical necessity for imaging, surgeries, infusions, or specialty medications before service delivery to guarantee claim coverage.

CMS post-payment audit contractors tasked with detecting and recouping improper Medicare overpayments (and identifying underpayments) through automated data mining and complex medical record reviews.

Supplemental alphanumeric codes (such as N-codes and M-codes) paired with CARCs on 835 remittances specifying the exact missing attachment, NPI error, or medical necessity policy triggered.

CMS resource-based components (Work RVU, Practice Expense RVU, and Malpractice RVU) multiplied by Geographic Practice Cost Indices (GPCIs) and the annual Medicare Conversion Factor to set CPT payment rates.

Contractual or statutory deadline following the date of service within which an initial claim or corrected appeal must reach the payer (e.g., 365 days for Original Medicare, 90 days for many commercial HMO/PPO contracts).

Institutional billing format using Revenue Codes, Type of Bill (TOB), Condition Codes, Value Codes, and DRG/APC groupings for hospitals, ASCs, skilled nursing facilities, and freestanding behavioral facilities.