What is the medical billing glossary?
The MedPrecision medical billing glossary is a citation-ready reference of 77 terms covering medical coding (CPT, ICD-10, HCPCS), payer types (Medicare, Medicaid, commercial), HIPAA and federal compliance, billing cycle steps, modifiers, CARC/RARC denial codes, and revenue cycle KPIs. Each definition is sourced to AMA, CMS, X12, and HHS publications.
- 77 terms across 10 categories
- Compliance: HIPAA, HITECH, AKS, Stark, FCA
- Coding: CPT, ICD-10-CM/PCS, HCPCS, NCCI, MUE
- Denial codes: CARC, RARC, CARC 97/50/197/27
- Modifiers: 25, 59, 24, TC, 26, KX, X-modifiers
- KPIs: Days in A/R, NCR, FPRR, denial rate
Medical Billing Glossary: A-Z
Definitions for 77 medical billing, coding, payer, compliance, and revenue cycle terms used in U.S. healthcare. Each entry traces to AMA CPT, CMS, X12, or HHS published sources.
Compliance
HIPAA, HITECH, federal fraud-and-abuse statutes
Anti-Kickback Statute
The Anti-Kickback Statute (42 USC 1320a-7b(b)) is a federal criminal law prohibiting the knowing and willful offer, payment, solicitation, or receipt of any remuneration to induce or reward referrals of items or services payable by a federal health care program.
Read definition arrow_forwardBusiness Associate Agreement (BAA)
A Business Associate Agreement is a HIPAA-required written contract under 45 CFR 164.504(e) between a covered entity and any vendor that creates, receives, maintains, or transmits PHI on its behalf, establishing the vendor's permitted uses, safeguards, and breach notification obligations.
Read definition arrow_forwardFalse Claims Act
The False Claims Act (31 USC 3729-3733) is a federal law imposing civil liability on any person who knowingly submits, or causes to be submitted, a false or fraudulent claim for payment to the U.S. government, with treble damages plus per-claim civil penalties.
Read definition arrow_forwardHIPAA
HIPAA is the 1996 federal law that establishes national standards for protecting the privacy and security of individually identifiable health information held by covered entities and their business associates.
Read definition arrow_forwardHITECH Act
HITECH is the 2009 federal law that strengthened HIPAA by extending direct liability to business associates, increasing breach notification requirements, and creating tiered civil monetary penalties for HIPAA violations.
Read definition arrow_forwardMinimum Necessary Rule
The Minimum Necessary Rule, codified at 45 CFR 164.502(b) and 164.514(d), requires covered entities and business associates to limit uses, disclosures, and requests of PHI to the minimum necessary to accomplish the intended purpose.
Read definition arrow_forwardPHI (Protected Health Information)
PHI is any individually identifiable health information transmitted or maintained by a HIPAA covered entity or business associate, in any form or medium, that relates to a person's past, present, or future physical or mental health, treatment, or payment for care.
Read definition arrow_forwardStark Law
The Stark Law (42 USC 1395nn) is a federal civil statute prohibiting physicians from referring Medicare or Medicaid patients for designated health services to entities with which the physician (or an immediate family member) has a financial relationship, unless an exception applies.
Read definition arrow_forwardPayers
Medicare, Medicaid, commercial insurance, MACs and TPAs
CMS
CMS is the federal agency within the U.S. Department of Health and Human Services that administers Medicare, jointly administers Medicaid and CHIP with the states, and oversees the Health Insurance Marketplaces and HIPAA administrative simplification.
Read definition arrow_forwardCommercial Payer
A commercial payer is a private (non-government) insurance company offering health coverage to individuals or employer groups, typically as PPO, HMO, EPO, or POS products under state insurance department regulation and ERISA for self-funded plans.
Read definition arrow_forwardMAC (Medicare Administrative Contractor)
A Medicare Administrative Contractor is a private organization that contracts with CMS to process Medicare Part A and Part B claims (or DME claims) within a defined geographic jurisdiction, applying CMS coverage rules and publishing local coverage determinations.
Read definition arrow_forwardMedicaid
Medicaid is a joint federal-state program established under Title XIX of the Social Security Act that provides health coverage to eligible low-income individuals, with each state administering its own program under federal minimum requirements.
Read definition arrow_forwardMedicaid Managed Care Organization (MCO)
A Medicaid Managed Care Organization is a private health plan that contracts with a state Medicaid agency to deliver Medicaid benefits to enrolled members under a capitated PMPM payment, accepting financial risk for member care.
Read definition arrow_forwardMedicare Advantage
Medicare Advantage (Part C) is private health-plan coverage that replaces Original Medicare Parts A and B, offered by insurers under contract with CMS, typically as HMO or PPO products with provider networks, prior-authorization, and capitated risk-adjusted CMS payments.
Read definition arrow_forwardMedicare Part A/B/C/D
Medicare is divided into four parts: Part A covers hospital inpatient, SNF, hospice, and home health; Part B covers physician services and outpatient care; Part C (Medicare Advantage) is private plans replacing A and B; Part D covers prescription drugs.
Read definition arrow_forwardTPA (Third Party Administrator)
A Third Party Administrator is an organization that processes claims, eligibility, and customer service for self-funded employer health plans without bearing the underlying insurance risk, which is retained by the employer plan sponsor.
Read definition arrow_forwardCoding
CPT, ICD-10, HCPCS, NCCI, DRG, APC, RVU
APC (Ambulatory Payment Classification)
An APC is the hospital outpatient classification system used by CMS under the Outpatient Prospective Payment System (OPPS) to group similar outpatient services for prospective payment to hospitals.
Read definition arrow_forwardCMS-1500 form
The CMS-1500 is the standard paper claim form used by non-institutional providers (physicians, NPPs, suppliers) to bill Medicare and most commercial payers; its electronic equivalent is the 837P (Professional) HIPAA EDI transaction.
Read definition arrow_forwardCPT (Current Procedural Terminology)
CPT is the five-digit procedural code set developed and maintained by the American Medical Association that describes medical, surgical, and diagnostic services performed by physicians and qualified health professionals; it is HIPAA-named for use in claims.
Read definition arrow_forwardDRG (Diagnosis-Related Group)
A DRG is the inpatient hospital classification system that groups admissions with similar clinical characteristics and resource use into a single payment category; CMS uses MS-DRGs to pay hospitals under the IPPS for Medicare inpatient stays.
Read definition arrow_forwardHCPCS Level I/II
HCPCS is the two-tier code set used to identify medical services and items: Level I is identical to AMA CPT codes; Level II is alphanumeric codes maintained by CMS for products, supplies, and services not covered by CPT.
Read definition arrow_forwardICD-10-CM
ICD-10-CM is the U.S. clinical modification of the WHO's ICD-10 diagnosis code set, maintained by the CDC's National Center for Health Statistics, used to report diagnoses on all HIPAA-covered claims.
Read definition arrow_forwardICD-10-PCS
ICD-10-PCS is the U.S. inpatient hospital procedural code set maintained by CMS, with seven-character alphanumeric codes used exclusively to report procedures performed during inpatient hospital admissions for billing under MS-DRGs.
Read definition arrow_forwardLCD / NCD (Local & National Coverage Determinations)
An NCD is a nationwide CMS coverage policy specifying whether Medicare will cover a service; an LCD is a coverage policy issued by a Medicare Administrative Contractor (MAC) for its jurisdiction when no NCD applies, defining medical necessity criteria and covered diagnosis codes.
Read definition arrow_forwardMUE (Medically Unlikely Edits)
MUEs are CMS-published per-line, per-beneficiary, per-day unit limits for HCPCS/CPT codes that flag claim lines exceeding the maximum number of units typically performed for a given service.
Read definition arrow_forwardNCCI (National Correct Coding Initiative)
NCCI is a CMS-published set of code-pair edits and per-day unit limits that prevent improper payment when incorrect code combinations are submitted; it includes Procedure-to-Procedure (PTP) edits and Medically Unlikely Edits (MUE).
Read definition arrow_forwardRVU (Relative Value Unit)
An RVU is a unit of measure in the Medicare Resource-Based Relative Value Scale (RBRVS) representing the relative resources required to perform a CPT/HCPCS service, comprising work, practice expense, and malpractice components.
Read definition arrow_forwardUB-04 form
The UB-04 (also known as CMS-1450) is the standard paper claim form used by institutional providers (hospitals, SNFs, home health, hospice) to bill Medicare and other payers; its electronic equivalent is the 837I (Institutional) HIPAA EDI transaction.
Read definition arrow_forwardBilling Cycle
Charge entry, scrubbing, ERA posting, A/R
A/R (Accounts Receivable)
Accounts receivable in medical billing is the total dollar amount of outstanding charges that have been billed to insurance payers and patients but not yet paid; A/R is tracked, aged, and worked by buckets (0-30, 31-60, 61-90, 91-120, 120+ days).
Read definition arrow_forwardAdjudication
Adjudication is the payer-side process of reviewing and determining how a claim will be paid: applying eligibility, benefits, coverage rules, contracted rates, and edits to determine the allowed amount, paid amount, patient responsibility, and any denials or adjustments.
Read definition arrow_forwardCharge Entry
Charge entry is the revenue cycle step where rendered services are translated into billable charges in the practice management system, including CPT/HCPCS codes, ICD-10 diagnoses, modifiers, units, and place-of-service codes.
Read definition arrow_forwardClaim Scrubbing
Claim scrubbing is the automated pre-submission process that runs claims through a rule-set of payer-specific and standards-based edits (NCCI, MUE, HIPAA syntax, payer policies) to identify and correct errors before the claim leaves the practice.
Read definition arrow_forwardClean Claim
A clean claim is a properly completed claim that requires no additional information from the provider, contains no errors or defects, and can be processed by the payer without manual intervention or follow-up.
Read definition arrow_forwardEOB (Explanation of Benefits)
An Explanation of Benefits is a payer-issued document sent to the member (and sometimes the provider) after claim adjudication that itemizes the services billed, allowed amount, plan payment, deductible/coinsurance/copay applied, and patient responsibility.
Read definition arrow_forwardERA (Electronic Remittance Advice / 835)
The ERA (X12 835 transaction) is the HIPAA-standard electronic file payers send to providers detailing claim adjudication results — payments, adjustments, denials with CARC/RARC codes — typically paired with EFT funds transfer.
Read definition arrow_forwardPayment Posting
Payment posting is the revenue cycle step where insurance payments (from 835 ERA or paper EOBs) and patient payments are applied to specific claim lines and patient accounts in the practice management system, including contractual adjustments and denial transfers.
Read definition arrow_forwardRegulation
No Surprises Act, parity, transparency, info blocking
21st Century Cures Act
The 21st Century Cures Act is a 2016 federal law that, among many other provisions, established information blocking prohibitions and patient access requirements for electronic health information, enforced under the ONC Cures Act Final Rule.
Read definition arrow_forwardEPSDT
EPSDT (Early and Periodic Screening, Diagnostic, and Treatment) is the comprehensive child health benefit under Title XIX of the Social Security Act that Medicaid programs must cover for enrollees under age 21, including all medically necessary services to correct or ameliorate a condition.
Read definition arrow_forwardInformation Blocking Rule
The Information Blocking Rule, codified at 45 CFR Part 171 under the 21st Century Cures Act, prohibits health care providers, health IT developers, and health information networks from engaging in practices likely to interfere with access, exchange, or use of electronic health information (EHI), subject to eight regulatory exceptions.
Read definition arrow_forwardMHPAEA
The Mental Health Parity and Addiction Equity Act of 2008 is a federal law that requires group health plans and health insurance issuers offering mental health and substance use disorder (MH/SUD) benefits to provide them no more restrictively than medical/surgical benefits.
Read definition arrow_forwardNo Surprises Act
The No Surprises Act is a federal law effective January 1, 2022 that prohibits balance billing for most out-of-network emergency services, certain non-emergency services at in-network facilities, and air ambulance services, with disputes resolved through an Independent Dispute Resolution (IDR) process.
Read definition arrow_forwardPrice Transparency Rule
Price Transparency Rules are federal regulations requiring hospitals to publish standard charges and negotiated rates publicly (effective 2021 under 45 CFR 180) and requiring health plans to publish in-network and out-of-network pricing files (effective 2022 under the Transparency in Coverage Rule).
Read definition arrow_forwardTechnology
EHR, PM systems, clearinghouses, X12 EDI, FHIR
Clearinghouse
A clearinghouse is a HIPAA-defined entity that processes health information from one format into a standard electronic format and transmits 837 claims, 835 remittances, 270/271 eligibility, and 276/277 claim status transactions between providers and payers.
Read definition arrow_forwardEHR (Electronic Health Record)
An Electronic Health Record is a digital, longitudinal record of a patient's health information maintained by a healthcare organization, designed to be shared across providers and care settings, and to support clinical decisions, billing, and quality reporting.
Read definition arrow_forwardEMR vs EHR
An EMR (Electronic Medical Record) is a digital version of a single practice's paper chart, designed for use within that practice; an EHR (Electronic Health Record) is a broader, interoperable longitudinal record designed to be shared across organizations and care settings.
Read definition arrow_forwardFHIR
FHIR (Fast Healthcare Interoperability Resources) is an HL7 standard for exchanging healthcare information using modern web technologies (RESTful APIs, JSON/XML, OAuth 2.0), used for clinical data exchange, patient access APIs, and increasingly for prior-authorization and quality reporting.
Read definition arrow_forwardPM (Practice Management) System
A Practice Management system is the software that handles the operational and financial workflow of a medical practice — scheduling, registration, eligibility, charge entry, claim submission, payment posting, A/R follow-up, and reporting — typically integrated with or embedded in an EHR.
Read definition arrow_forwardX12 (HIPAA EDI)
ASC X12 is the standards body whose X12N subcommittee develops the HIPAA-named electronic data interchange transactions for healthcare administrative data: 837 (claims), 835 (remittance), 270/271 (eligibility), 276/277 (claim status), 278 (prior auth), and 834 (enrollment).
Read definition arrow_forwardKPIs
Days in A/R, NCR, denial rate, FPRR, charge lag, cost-to-collect
Charge Lag
Charge Lag is a KPI measuring the average number of days between a service's date of service (DOS) and the date the charge is entered into the practice management system, indicating front-end revenue cycle speed.
Read definition arrow_forwardCost-to-Collect
Cost-to-Collect is the total cost of revenue cycle operations (labor, software, vendor fees, clearinghouse, payment processing) divided by total cash collected, expressed as a percentage; it measures the efficiency of converting billed services into cash.
Read definition arrow_forwardDays in A/R
Days in A/R is a KPI calculated as Total Accounts Receivable divided by Average Daily Charges (typically 90-day rolling average), representing the average number of days it takes a practice to collect on a billed charge.
Read definition arrow_forwardDenial Rate
Denial Rate is the percentage of claims (or claim dollars) denied by payers on initial adjudication, calculated as Denied Claims ÷ Total Claims Adjudicated × 100, typically tracked monthly and segmented by payer and denial reason category.
Read definition arrow_forwardFirst-Pass Resolution Rate
First-Pass Resolution Rate is the percentage of claims paid in full (or adjudicated to final status) on the first submission without rejection, denial, or rebill — a topline measure of revenue cycle efficiency and front-end accuracy.
Read definition arrow_forwardNet Collection Rate
Net Collection Rate is the percentage of allowed (contracted) revenue actually collected, calculated as Payments ÷ (Charges − Contractual Adjustments) over a rolling period; it measures how effectively a practice collects what it is contractually entitled to receive.
Read definition arrow_forwardModifiers
25, 59, 24, 51, 76, 78, 79, TC, 26, KX, X-modifiers
Modifier 24
Modifier 24 is appended to an E/M code to indicate an unrelated evaluation and management service provided by the same physician during the global postoperative period of a procedure.
Read definition arrow_forwardModifier 25
Modifier 25, defined by the AMA CPT, indicates a significant, separately identifiable evaluation and management (E/M) service performed by the same physician on the same day as another procedure or other service.
Read definition arrow_forwardModifier 26
Modifier 26 is appended to a diagnostic procedure code to indicate that only the professional component — physician interpretation and report — is being billed, with the technical component (equipment, supplies, tech) billed separately by another entity.
Read definition arrow_forwardModifier 51
Modifier 51 is appended to the second and subsequent procedures when multiple procedures are performed at the same session by the same provider, signaling the payer to apply multiple-procedure payment reduction (typically 50% of the secondary procedures' fee schedule amounts).
Read definition arrow_forwardModifier 59
Modifier 59 is appended to a procedure code to indicate that a service was distinct or independent from other non-E/M services performed on the same day, used to bypass NCCI Procedure-to-Procedure (PTP) edits when documentation supports a separately identifiable service.
Read definition arrow_forwardModifier 76
Modifier 76 indicates that a procedure or service was repeated by the same physician or qualified health care professional subsequent to the original procedure or service on the same day.
Read definition arrow_forwardModifier 78
Modifier 78 is appended to a procedure code to indicate an unplanned return to the operating or procedure room by the same physician for a related procedure during the global postoperative period of the original surgery.
Read definition arrow_forwardModifier 79
Modifier 79 is appended to a procedure code to indicate an unrelated procedure or service by the same physician during the global postoperative period of an earlier procedure, separating the new procedure from the earlier surgery's global package.
Read definition arrow_forwardModifier KX
Modifier KX is a HCPCS Level II modifier appended to a claim line to attest that the documented medical-necessity requirements specified in the applicable Medicare LCD or NCD have been met, used for therapy services exceeding annual thresholds and for certain DME and laboratory services.
Read definition arrow_forwardModifier TC
Modifier TC is a HCPCS Level II modifier appended to diagnostic procedures (imaging, cardiology testing, EEG, etc.) to indicate that only the technical component — equipment, supplies, technologist labor, and overhead — is being billed, not the professional interpretation.
Read definition arrow_forwardModifiers XE, XS, XP, XU
The X-modifiers (XE, XS, XP, XU) are HCPCS Level II modifiers introduced by CMS in 2015 as more specific subsets of Modifier 59, identifying the specific reason a procedure is distinct from another service: separate Encounter, separate Site, separate Practitioner, or Unusual non-overlapping service.
Read definition arrow_forwardDenial Codes
CARC, RARC, CARC 97/50/197/27
CARC
A Claim Adjustment Reason Code is a standardized code maintained by the X12 External Code List committee that explains why a claim line was adjusted (paid less than billed, denied, or transferred to patient responsibility) on a payer's 835 ERA.
Read definition arrow_forwardCARC 197
CARC 197 indicates a denial because precertification, authorization, or notification required by the payer was not obtained before the service was rendered, often paired with RARCs identifying the specific authorization missing.
Read definition arrow_forwardCARC 27
CARC 27 indicates a denial because the patient's coverage with the payer had terminated before the date of service, meaning the patient was not insured by this payer on the day services were rendered.
Read definition arrow_forwardCARC 50
CARC 50 indicates the payer denied a claim because it determined the services were not medically necessary based on its medical-necessity policy, LCD, NCD, or commercial medical-policy criteria.
Read definition arrow_forwardCARC 97
CARC 97 indicates the payer denied or reduced payment because the service is bundled with another service on the same claim under NCCI Procedure-to-Procedure edits — 'The benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated.'
Read definition arrow_forwardRARC
A Remittance Advice Remark Code is a supplemental code used on the 835 ERA to provide additional information about an adjustment, often clarifying or specifying the reason behind a CARC; RARCs are maintained by CMS and the Remittance Advice Code Committee.
Read definition arrow_forwardRCM Specialty
Revenue cycle, credentialing, prior auth, eligibility
Eligibility Verification
Eligibility verification is the process of confirming a patient's insurance coverage is active for the date of service, determining the plan benefits (deductible, copay, coinsurance, covered services), and identifying any prior-auth or referral requirements before the encounter.
Read definition arrow_forwardFront-end vs Back-end RCM
Front-end RCM covers the patient-access activities before the encounter (scheduling, registration, eligibility, prior auth, financial counseling, point-of-service collections); back-end RCM covers post-encounter activities (claim submission, payment posting, denial management, A/R follow-up, patient collections).
Read definition arrow_forwardPrior Authorization
Prior authorization is the payer's process of pre-approving a planned service, procedure, medication, or admission before it is rendered, based on medical-necessity criteria; without an approved PA where required, claims typically deny under CARC 197.
Read definition arrow_forwardProvider Credentialing
Provider credentialing is the process by which a payer verifies a provider's qualifications, training, licensure, malpractice history, and other professional credentials before adding the provider to its network and authorizing reimbursement.
Read definition arrow_forwardProvider Enrollment
Provider enrollment is the process of formally setting up a provider in a payer's claims system as a participating provider, including establishing billing privileges, EFT/ERA setup, and the contractual effective date for in-network reimbursement.
Read definition arrow_forwardRCM (Revenue Cycle Management)
Revenue Cycle Management is the end-to-end financial process by which healthcare organizations identify, collect, and manage revenue from patient services — spanning patient access, eligibility, coding, charge capture, claim submission, payment posting, denial management, and patient collections.
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