Glossary

Accounts receivable (A/R) is the money owed to a provider for care already delivered but not yet collected — from payers and from patients.

Adjudication is the payer’s process of reviewing a submitted claim against the member’s plan and deciding what to pay — approving, adjusting, or denying it.

Charge capture is the process of recording every billable service a provider delivered so it can be coded and billed — making sure the practice bills for all the care it gave.

A clean claim carries everything a payer needs to adjudicate it on first submission — no missing data, no manual intervention, no request for more information.

A clearinghouse is an intermediary that receives claims from providers, scrubs them against payer edits, and routes them electronically to the right payers — returning rejections and remittances.

A contractual adjustment is the difference between a provider’s billed charge and the amount the payer’s contract allows — an agreed write-down, not a patient balance.

A CPT (Current Procedural Terminology) code reports the medical, surgical, or diagnostic service a provider performed — the “what was done” on a claim.

Credentialing is the process of verifying a provider’s qualifications so they can join a payer’s network or be granted privileges at a facility.

A denial is a claim a payer has processed and refused to pay, in whole or part, with the reason returned as standardized codes on the remittance.

Eligibility verification is confirming, before or at the visit, that a patient’s insurance is active and covers the planned service — and what the patient will owe.

An EOB is the statement a health plan sends the patient explaining how a claim was processed — what was billed, allowed, and paid, and what the patient owes. It is not a bill.

ICD-10 is the diagnosis coding system used in the US to report a patient’s condition on a claim — the “why” that justifies a service.

Prior authorization is a payer’s requirement that a provider obtain approval before delivering certain services — without it, the payer may not cover the care.

A remittance advice is the payer’s explanation to the provider of how a claim was paid or denied — what was allowed, paid, adjusted, and left to the patient. The electronic form is the ERA (X12 835).