RCM Glossary: Key Acronyms and Terms

Revenue Cycle Management Glossary#

• RCM — Revenue Cycle Management. The financial process tracking patient service revenue from first contact to final payment.
• A/R — Accounts Receivable. Money owed to the provider for services billed but not yet collected. "Days in A/R" measures collection speed.
• CARC — Claim Adjustment Reason Code. Standardized code explaining why a claim/line was paid differently than billed.
• RARC — Remittance Advice Remark Code. Supplemental code adding detail to a CARC (N-codes and M-codes).
• Group Code — Prefix on a CARC assigning responsibility: CO (contractual obligation, provider), PR (patient responsibility), OA (other), PI (payer initiated).
• ERA — Electronic Remittance Advice. The electronic payment/adjustment detail sent to the provider, carried by the X12 835.
• EOB — Explanation of Benefits. The statement sent to the patient explaining how their claim was processed (not a bill).
• EFT — Electronic Funds Transfer. The electronic deposit of the payment; reassociated to the 835 via the TRN trace number.
• 835 — X12 Health Care Claim Payment/Advice transaction (the ERA).
• 837 — X12 Health Care Claim transaction (P = professional/CMS-1500, I = institutional/UB-04, D = dental).
• 270/271 — Eligibility/benefit inquiry and response.
• 276/277 — Claim status inquiry and response; 277CA = claim acknowledgment.
• 278 — Health care services review (electronic prior authorization).
• ICD-10-CM — Diagnosis code set establishing medical necessity.
• CPT / HCPCS — Procedure/service code sets (HCPCS Level I = CPT; Level II = supplies, drugs, DME).
• NCCI — National Correct Coding Initiative; PTP edits drive bundling denials (CARC 97).
• LCD / NCD — Local / National Coverage Determination; Medicare medical-necessity policies.
• Prior Authorization (precertification) — Payer approval required *before* a service as a condition of payment.
• COB — Coordination of Benefits; rules deciding primary vs. secondary payer.
• Clean-Claim Rate — Share of claims accepted/adjudicated correctly on first submission.
• Denial Rate — Share of submitted claims denied after adjudication.
• Net Collection Rate — Collected revenue as a share of contractually collectible revenue.
• Clearinghouse — Intermediary that scrubs, formats, and routes claims between providers and payers.
• Timely Filing — The payer's deadline to submit a claim; missing it yields CARC 29.