Resources · glossary
RCM terms, in plain language.
Short, general definitions for leaders and teams. Definitions and benchmarks vary by organization and payer — this is not coding, billing or legal advice. More reading in resources.
- Revenue cycle management (RCM)
- The administrative and financial process of getting a healthcare provider paid — from scheduling and eligibility through coding, claim submission, payment posting, denials and collections.
- RCM company
- A firm that runs some or all of the revenue cycle on behalf of healthcare providers. Many serve US providers from offshore locations such as India.
- EHR (electronic health record)
- The clinical system where providers document care, including progress notes and treatment plans.
- PMS (practice management system)
- The administrative system for scheduling, patient demographics, charges and billing. Sometimes combined with the EHR.
- Clearinghouse
- An intermediary that checks claim formatting and routes electronic claims and responses between providers and payers.
- Eligibility verification
- Confirming a patient's coverage and benefits for a service before it is delivered.
- Prior authorization
- Payer approval required before certain services. Authorizations may limit the number of visits or units and the dates they cover.
- 837 (837P / 837I)
- The standard electronic format for submitting healthcare claims — 837P for professional, 837I for institutional.
- 835 (ERA)
- The electronic remittance advice: the payer's response explaining what was paid, adjusted or denied, with reason codes.
- Denial
- A payer's refusal to pay a claim or claim line, usually with a reason code. Some denials can be corrected and resubmitted or appealed.
- Appeal
- A formal request asking the payer to reconsider a denial, normally with supporting documentation and within a payer-defined deadline.
- Write-off
- An amount removed from what is collectible — for example contractual adjustments, or balances that were not recovered.
- Days in AR
- The average number of days it takes to collect payment after a service. Benchmarks vary by specialty, payer mix and method of calculation.
- First-pass acceptance
- The share of claims accepted (or paid) on first submission without rework. Definitions differ between organizations.
- Gross vs net collection rate
- Gross collection rate compares payments to total charges. Net collection rate compares payments to what was contractually collectible, so it better reflects revenue actually lost.
- Estimated exposure
- Revenue that may be at risk because of a potential issue. It is an estimate for prioritization, not a confirmed loss.
- Potential recovery
- The part of estimated exposure that might be recovered with action. It is not guaranteed.
- Verified recovered collections
- Payments actually received as a result of corrective work. AiMediCoder always reports this separately from estimates.