Medical Billing & RCM Glossary

The payer’s statement explaining how a claim was processed — what was allowed, paid, adjusted, and left to the patient.

The electronic remittance file a payer sends so payments and adjustments can be posted automatically to claims.

A payer’s advance approval that a service is covered — required for many procedures before they are performed.

Confirming a patient’s active coverage and benefits before the visit — the first line of defense against denials.

An itemized encounter form listing the services, codes, and diagnoses used to generate a claim.

A two-character code appended to a CPT/HCPCS code to add necessary detail without changing the code’s meaning.

Flags a significant, separately identifiable E/M service performed on the same day as a procedure.

A two-digit code on the claim that tells the payer where the service was delivered.

The five-character code that says what service or procedure was performed.

Codes for supplies, drugs, equipment, and services that CPT alone does not cover.

The diagnosis code set that explains why a service was medically necessary.

The requirement that a service be appropriate and needed for the patient’s condition.

The unique 10-digit identifier for a healthcare provider or organization used on claims and transactions.

Verifying a provider’s qualifications and enrolling them with payers so services can be billed in network.

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

An intermediary that checks, formats, and routes claims between providers and payers.