Medical Billing Glossary

Accounts Receivable (A/R)

The total amount of money owed to a medical practice by patients and insurance payers for services already rendered. A/R is tracked by age buckets (0 to 30, 31 to 60, 61 to 90, 90+ days). Healthy practices keep 85%+ of A/R under 60 days. Learn more about our Accounts Receivable (A/R) services.

Adjudication

The process by which an insurance payer reviews a submitted claim, determines coverage, and decides how much to pay. Adjudication results in payment, denial, or a request for additional information.

Advance Beneficiary Notice (ABN)

A form given to Medicare patients before a service is provided, notifying them that Medicare may not cover the service and they may be financially responsible. Required for certain lab tests, DME, and procedures with questionable medical necessity.

Appeal

A formal request to an insurance payer to reconsider a denied or underpaid claim. Appeals must include supporting documentation such as clinical notes, medical necessity letters, and coding rationale. Our denial management team handles appeals as part of our A/R recovery services.

Authorization (Prior Authorization)

Pre-approval from an insurance payer before a medical service is provided. Required for many surgical procedures, imaging studies, DME, and specialty medications. Without authorization, claims are typically denied. Learn more about our Authorization (Prior Authorization) services.

Balance Billing

The practice of billing a patient for the difference between a provider’s billed charge and the amount the insurance payer allows. Balance billing is restricted or prohibited in many states for in network services and emergency care under the No Surprises Act. Learn more about our Balance Billing services.

Bundling

When multiple procedure codes are combined into a single code for billing purposes. Payers use bundling rules (like CCI edits) to prevent separate billing for procedures that are considered part of a single service. Incorrect unbundling is a common audit trigger.

CAQH ProView

The universal credentialing database used by most commercial payers to verify provider qualifications. Providers must maintain an active, attested CAQH profile for payer enrollment. Our team manages CAQH profiles as part of our CAQH ProView services.

Charge Capture

The process of recording all billable services performed during a patient encounter. Missed charges are the most common source of revenue leakage in medical practices. Our coding team verifies charge capture on every encounter as part of our billing and coding services.

Clean Claim

A claim that passes all payer edits on first submission without errors in patient demographics, coding, authorization, or documentation. Clean claims get paid faster and cost less to manage. Go Medical Billing maintains a clean claim rate above 98%.

CMS-1500

The standard paper or electronic claim form used to bill Medicare and most commercial payers for professional (physician) services. The electronic equivalent is the 837P transaction. Our billing team submits claims on CMS-1500 and UB-04 forms.

Coordination of Benefits (COB)

The process of determining which insurance payer is primary, secondary, or tertiary when a patient has multiple coverage. Incorrect COB is a top reason for claim denials. Our eligibility verification service catches COB issues before claims are submitted.

Copay

A fixed dollar amount a patient pays at the time of service, as defined by their insurance plan. Copay amounts vary by visit type (primary care, specialist, urgent care, ER).

CPT Code (Current Procedural Terminology)

A five digit numeric code maintained by the AMA that describes medical procedures and services. CPT codes are required on every professional claim. Examples: 99213 (office visit), 93000 (ECG), 20610 (joint injection). Our AAPC certified coders assign CPT codes as part of our coding services.

Credentialing

The process of verifying a healthcare provider’s qualifications (education, licenses, certifications, malpractice history) and enrolling them with insurance payers. Without active credentialing, providers can’t bill insurance. Learn more about our Credentialing services.

Deductible

The amount a patient must pay out of pocket before their insurance begins covering services. High deductible health plans (HDHPs) have shifted more financial responsibility to patients, making patient billing increasingly important.

Denial

A claim that an insurance payer refuses to pay. Common denial reasons include eligibility issues, missing authorization, coding errors, and medical necessity challenges. Each denied claim costs $25 to $30 to rework. Our team prevents and appeals denials as part of our A/R services.

DME (Durable Medical Equipment)

Medical equipment prescribed for home use, such as wheelchairs, CPAP machines, oxygen equipment, and hospital beds. DME billing uses HCPCS Level II codes and requires Certificates of Medical Necessity. Learn more about our DME (Durable Medical Equipment) services.

DRG (Diagnosis Related Group)

A classification system used to determine Medicare inpatient hospital payments. Each DRG has a payment weight based on the principal diagnosis, procedures performed, and complications. Our chart auditing service validates DRG assignments.

E/M Code (Evaluation and Management)

CPT codes (99202 through 99215 for office visits) that describe the level of care provided during a patient encounter. E/M level is based on medical decision making complexity or total time. Correct E/M coding is one of the most impactful factors in practice revenue.

EHR (Electronic Health Record)

A digital version of a patient’s medical chart. EHR systems feed clinical documentation into the billing process. Go Medical Billing integrates with all major EHR platforms including eClinicalWorks, Athenahealth, AdvancedMD, Kareo, DrChrono, NextGen, Epic, and Cerner.

Eligibility Verification

Confirming a patient’s insurance coverage, benefits, deductibles, copays, and authorization requirements before the date of service. Proper verification prevents eligibility related denials, which account for roughly 25% of all claim rejections. Learn more about our Eligibility Verification services.

EOB (Explanation of Benefits)

A document sent by an insurance payer to the patient and provider after a claim is processed. The EOB shows what was billed, what the payer allowed, what they paid, and what the patient owes.

ERA (Electronic Remittance Advice)

The electronic version of an EOB sent directly to the provider’s billing system. ERAs enable automated payment posting and reconciliation.

Fee Schedule

A list of accepted payment amounts for specific medical services, as determined by a payer contract. Medicare publishes its fee schedule (MPFS) annually. Commercial payer fee schedules are negotiated during contracting.

First Pass Rate

The percentage of claims that are accepted and paid on the first submission without requiring rework or appeal. Industry average is 85 to 90%. Go Medical Billing clients consistently see rates above 96%.

Global Period

A post operative period (typically 10 or 90 days) during which follow up visits related to a surgical procedure are included in the surgical payment and can’t be billed separately. Understanding global periods is critical for correct surgical billing.

HCPCS (Healthcare Common Procedure Coding System)

A coding system with two levels: Level I is CPT codes, Level II covers supplies, DME, drugs, and services not included in CPT. HCPCS Level II codes start with a letter (E, K, L, J, etc.). Essential for DME billing.

HIPAA (Health Insurance Portability and Accountability Act)

Federal law that sets standards for protecting patient health information. HIPAA compliance is mandatory for every entity that handles PHI, including billing companies. Go Medical Billing maintains full HIPAA compliance with encrypted data transmission, access controls, and documented security policies.

ICD-10-CM

The International Classification of Diseases, 10th Revision, Clinical Modification. ICD-10 codes describe diagnoses and are required on every medical claim. The code set is updated annually every October. Our AAPC certified coders stay current on all ICD-10 updates.

LCD (Local Coverage Determination)

A decision by a Medicare Administrative Contractor (MAC) about whether a particular service is covered in their jurisdiction. LCDs affect medical necessity determinations and vary by MAC region.

Medical Necessity

The standard used by payers to determine whether a service is clinically appropriate for a patient’s condition. Claims can be denied for lack of medical necessity even when the service was properly coded. Documentation must support medical necessity for every billed service.

Modifier

A two character code appended to a CPT or HCPCS code to provide additional information. Common modifiers: 25 (significant, separately identifiable E/M), 59 (distinct procedural service), 26 (professional component), TC (technical component). Incorrect modifier usage is a leading cause of claim denials.

MAC (Medicare Administrative Contractor)

The private companies that process Medicare claims in specific geographic regions. Examples: Palmetto GBA, Novitas Solutions, CGS Administrators, First Coast Service Options, Noridian. Each MAC has its own LCDs and processing rules.

NPI (National Provider Identifier)

A unique 10 digit number assigned to every healthcare provider and organization. NPIs are required on every claim submission. Type 1 NPIs are for individual providers; Type 2 NPIs are for organizations.

No Surprises Act

Federal law effective January 2022 that protects patients from surprise out of network medical bills for emergency services and certain non emergency services at in network facilities. Affects how providers can bill and collect for out of network services.

Out of Network (OON)

When a provider does not have a contract with a patient’s insurance plan. OON services are typically reimbursed at lower rates and the patient may owe a larger share. Our OON negotiation team recovers fair reimbursement on underpaid OON claims.

Payment Posting

The process of recording insurance payments, patient payments, adjustments, and denials in the practice management system. Accurate payment posting is essential for identifying underpayments and tracking A/R. Part of our billing services.

PECOS (Provider Enrollment, Chain, and Ownership System)

The CMS online system used to enroll providers in Medicare. PECOS enrollment is required before a provider can bill Medicare. Our credentialing team handles PECOS enrollment and updates.

Place of Service (POS) Code

A two digit code on claims that indicates where the service was provided. Common codes: 11 (office), 21 (inpatient hospital), 22 (outpatient hospital), 23 (emergency room), 02 (telehealth). POS affects reimbursement rates.

Preauthorization

See Authorization (Prior Authorization) above.

Revenue Cycle Management (RCM)

The entire financial process of a healthcare encounter, from patient scheduling and eligibility verification through charge capture, coding, claim submission, payment posting, denial management, and patient collections. Go Medical Billing provides end to end RCM.

Remittance Advice (RA)

A document from a payer explaining how claims were processed, including paid amounts, adjustments, and denial reasons. Electronic remittance (ERA/835) enables automated posting.

Superbill

A form listing the services and diagnosis codes for a patient encounter, used to communicate charges from the provider to the billing team. Also called an encounter form or charge ticket.

Timely Filing

The deadline by which a claim must be submitted to a payer after the date of service. Timely filing limits vary by payer (typically 90 days to 1 year). Claims submitted after the deadline are denied without appeal rights. Our daily submission process ensures no claim misses its filing deadline.

UB-04

The standard claim form used for institutional (hospital, facility) billing. The electronic equivalent is the 837I transaction. Used for inpatient, outpatient, skilled nursing, and home health claims.

Underpayment

When a payer pays less than the contracted rate for a service. Underpayments are identified during payment posting by comparing the paid amount against the fee schedule. Our team identifies and pursues underpayments on every remittance.

Upcoding

Billing for a higher level of service than what was documented or provided. Upcoding is a compliance violation that can trigger audits, recoupments, and penalties. Go Medical Billing codes strictly to the documentation, never above it.

Write-Off

The amount of a charge that is removed from A/R because it can’t be collected. Write-offs can be contractual (the difference between billed charges and allowed amounts) or bad debt (patient balances deemed uncollectible).

Workers’ Compensation

Insurance that covers medical treatment for work related injuries and illnesses. Workers’ comp billing has its own rules, fee schedules, and claim forms that differ from commercial insurance.