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Medical Billing Glossary — Key RCM & Coding Terms Explained
Plain-language definitions for the medical billing, coding, insurance, compliance, and revenue cycle terms providers and practices run into most. For specific questions about how RCMEasy works, see our Medical Billing FAQs.
- Billing & Claims Basics
- Medical Coding Terms
- Insurance & Payer Terms
- Compliance & Privacy Terms
- Patient Financial Terms
- RCM Performance & Metrics
Use the table of contents below to jump straight to a category.
Billing & Claims Basics
The process of turning a patient encounter into a claim, submitting that claim to insurance payers, and collecting payment for the services a provider delivered.
A formal request submitted to an insurance payer for reimbursement for medical services that have been provided to a patient.
A claim submitted with no errors or missing information, so the payer can process it without requesting additional documentation. A high clean claim rate is one of the clearest signs of a well-run billing process.
A third-party intermediary that checks (or "scrubs") electronic claims for errors and routes them from a provider's billing system to the correct insurance payer.
The process of checking a claim for coding and formatting errors before it's submitted, to reduce the chance of a denial or rejection.
An itemized form a provider generates after a visit, listing the services performed and the diagnosis and procedure codes, which is then used to create the actual claim.
The deadline set by an insurance payer for submitting a claim after a service is provided. A claim submitted after this window is typically denied regardless of its accuracy, which is why consistent revenue cycle management matters.
The process by which a payer reviews a submitted claim and decides how much to pay, whether to deny it, or whether to reduce the payment amount.
A document a payer sends after adjudicating a claim, explaining what was paid, adjusted, or denied and why. The electronic version (ERA) is what most billing software uses to post payments automatically.
A statement sent to the patient (not a bill) explaining what was billed, what insurance covered, and what the patient may owe.
Medical Coding Terms
The process of translating a clinical encounter into standardized CPT, ICD-10, and HCPCS codes, which billing then uses to create and submit claims.
A standardized set of codes that describe the specific medical, surgical, or diagnostic procedures a provider performed during a visit.
A diagnosis coding system used to document the medical reason a service was provided — the "why," as opposed to CPT's "what."
A code set that covers medical supplies, equipment, and services — like ambulance rides or durable medical equipment — that aren't included in CPT.
A two-character code appended to a CPT or HCPCS code to clarify or adjust how a service should be interpreted or reimbursed, without changing the underlying procedure code itself.
Billing a higher-level or more expensive code than the documentation actually supports. This is a compliance risk, whether it happens intentionally or by error, which is why specialty-trained coders matter.
When a claim is billed, or later reduced by a payer, to a lower-level code than the documentation actually supports — often resulting in lower reimbursement than the service warranted.
Bundling groups related services under a single comprehensive code; unbundling is improperly billing those same services separately to increase reimbursement, which payers flag as a compliance issue.
The set number of days after a surgical or major procedure during which related follow-up care is considered included in the original payment, rather than billed separately.
A unique 10-digit identification number assigned to individual providers and organizations, required on virtually every claim submitted.
Insurance & Payer Terms
The insurance company, government program (like Medicare or Medicaid), or other entity responsible for paying a claim.
The proportion of a practice's patients covered by each type of payer — commercial insurance, Medicare, Medicaid, or self-pay — which affects both reimbursement rates and billing complexity.
Approval a payer requires before certain procedures, imaging, or medications are provided; without it, a subsequent claim is likely to be denied outright.
Confirming a patient's insurance coverage, benefits, and active status before a visit or before a claim is submitted, to catch coverage issues before they become denials.
The process of determining which insurance plan pays first when a patient is covered by more than one policy.
Whether a provider has a contracted reimbursement agreement with a given payer (in-network) or not (out-of-network) — a distinction that affects both the payment rate and the patient's out-of-pocket cost.
A payment model in which providers are reimbursed for each individual service rendered, as opposed to a flat per-patient or outcomes-based rate.
A payment model in which a provider receives a fixed amount per patient over a set period, regardless of how many services that patient actually uses.
The process of verifying a provider's licenses, education, and qualifications so they can be formally enrolled as an in-network provider with a given payer.
The portion of a billed charge that a provider agrees not to collect, per the discounted rate set in their contract with a payer — distinct from a balance a patient still owes.
Compliance & Privacy Terms
The federal law that sets privacy and security standards for how Protected Health Information (PHI) is handled. See our Security & Compliance page for how RCMEasy structures data access under HIPAA.
A required contract between a healthcare provider and any vendor — including a billing company — that handles PHI on the provider's behalf, defining how that data must be protected.
Individually identifiable health information — like a patient's name linked to their diagnosis or treatment — that's protected under HIPAA.
An internal or external review that checks whether a practice's billing and coding practices align with payer rules and federal regulations.
A regulatory category covering billing practices that improperly charge payers, whether through intentional deception (fraud) or careless, non-intentional errors (waste and abuse).
CMS-defined rules that prevent certain code combinations from being billed together on the same claim, to stop improper bundling or duplicate billing.
Patient Financial Terms
The amount a patient must pay out of pocket for covered services before their insurance plan begins to pay.
A fixed dollar amount a patient pays at the time of a visit or service, regardless of the total cost of that service.
The percentage of a covered service's cost a patient is responsible for after they've met their deductible.
The most a patient will have to pay for covered services in a plan year; once it's reached, the insurance plan covers 100% of covered costs for the rest of that year.
The bill sent directly to a patient for the portion of a balance they owe after insurance has processed and paid its share of the claim.
A patient paying for services directly, out of pocket, without billing an insurance plan.
RCM Performance & Metrics
The entire financial process of a patient encounter, from eligibility verification and coding through claim submission, payment posting, and denial management.
The process of reviewing denied claims for their root cause, correcting what can be corrected, and appealing them promptly rather than writing them off.
The total amount currently owed to a practice for services that have already been provided but not yet paid.
The average number of days it takes a practice to collect payment after a claim is submitted — one of the clearest indicators of revenue cycle health, visible in real time through RCMEasy's client portal.
The percentage of claims that are paid in full after their very first submission, with no rework, appeal, or resubmission required.
A report that groups outstanding claims or patient balances by how long they've been unpaid (for example, 30, 60, or 90+ days), used to prioritize follow-up.
A specific metric — like denial rate, days in A/R, or collection rate — tracked over time to evaluate the health of a practice's revenue cycle.
The percentage of submitted claims that are accepted by the payer without errors on the first attempt, a core efficiency metric for any billing operation.