What Is PM (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.
PM (Practice Management) System
Also known as: Practice Management Software; PMS; Billing 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.
Definition
PM systems handle the front-office and back-office revenue cycle: appointment scheduling, patient registration, insurance eligibility (270/271), prior-auth tracking, charge capture, claim scrubbing, 837 EDI submission to clearinghouses, 835 ERA auto-posting, denial management, A/R follow-up, patient statements, and financial reporting. Standalone PM systems include Kareo, AdvancedMD, CollaborateMD, and PracticeSuite. Combined EHR/PM platforms include athenaOne, eClinicalWorks, NextGen, DrChrono, and Epic Resolute. Larger practices and health systems often use a separate PM/billing platform (Epic Resolute, Cerner Soarian, AthenaCollector) integrated with the EHR.
Example
When a coder enters charges in the PM system, scrubbing rules fire, the claim is queued for batch submission to the clearinghouse, the 999 acknowledgement comes back from the payer, the 277CA claim status report flags any rejections, and 14-30 days later the 835 ERA auto-posts the payment.
Common Misconceptions
A PM system's billing capabilities matter more than EHR capabilities for revenue performance — yet practices often pick EHRs primarily on clinical features. Cheap PM systems with limited scrubbing, weak denial workflow, or poor reporting cost far more in lost revenue than they save in subscription fees.
Practical Application
Evaluate PM systems on: edit-rule depth (can you build custom edits per payer), 835 auto-posting rates achievable, denial-workflow flexibility, KPI dashboards (Days in A/R, Net Collection Rate, denial rate by category), and reporting/export capabilities for analytics.
Related Terms
EHR (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_forwardClearinghouse
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_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_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_forwardWhere This Applies on MedPrecision
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