Medical Billing Glossary
The terms that show up in every revenue cycle management contract, explained in plain English. Keep it next to you when you review a vendor proposal — most pricing disputes come from a term that was defined differently by each side.
Core metrics
- Clean claim rate — share of claims accepted by the payer on first submission with no rework. Vendors quote this constantly; always ask for the definition and the reporting period behind the number.
- Denial rate — share of claims rejected or unpaid after submission. Useful only when broken down by payer and by reason code.
- Days in A/R — average number of days between service and payment. Compare like with like: some vendors count from charge entry, others from date of service.
- Net collection rate — cash actually collected divided by what was contractually collectable. The closest thing to a single measure of billing performance.
- First-pass resolution — share of denials fixed on the first appeal rather than after several cycles.
- Aged A/R — receivables grouped by age (0–30, 31–60, 61–90, 90+ days). A high 90+ bucket is the usual sign that appeals are not being worked.
Process terms
- Claims scrubbing — automated and manual checks run before submission to catch coding, eligibility and format errors.
- Charge capture — recording every billable service at the point of care; missed charges never appear in A/R at all.
- Eligibility verification — confirming coverage and benefits before the visit, the cheapest denial prevention step available.
- Prior authorisation — payer approval required before certain procedures; missing it is a common, fully avoidable denial.
- Coding (ICD / CPT / HCPCS) — translating the clinical record into standard code sets. Coding quality drives both payment speed and audit risk.
- Remittance advice (ERA / EOB) — the payer's explanation of what was paid, adjusted or denied.
- Appeals / redetermination — the formal request to reconsider a denied claim, with deadlines that vary by payer.
Contract and compliance terms
- RCM (revenue cycle management) — the whole path from scheduling and eligibility to collection and reporting.
- BAA (business associate agreement) — the contract required before a vendor handles protected health information.
- HIPAA — US rules on privacy and security of health information; check the vendor's safeguards and breach history.
- Percentage-of-collections pricing — the vendor is paid a share of what it collects. Confirm whether old A/R, appeals and patient balances are inside or outside the fee.
- Per-claim pricing — a flat fee per claim submitted. Cheap for high-value claims, expensive for low-value ones.
- Excluded services — tasks outside the base fee, typically patient statements, collections, credentialing and software licences. Get them in writing.
- Exit and data handover — what you get back if you leave: claim history, A/R, reports and work-in-progress on appeals.
Note: definitions follow common US revenue cycle usage. Payer-specific rules and statutory deadlines differ by market and change over time — verify them with the payer or a qualified adviser.