Medical A/R and denial glossary
The terms that appear in aging reports, remittances, and our Recovery opportunity reports, defined the way we use them.
A/R (accounts receivable)
Money owed to a practice for services already rendered. Insurance A/R is owed by payers; patient A/R by patients.
Aging report
A listing of open balances grouped by how long they have been outstanding, usually 0–30, 31–60, 61–90, 91–120, and 120+ days.
Actionable A/R
The portion of aged A/R that is inside payer deadlines and has a valid recovery path.
Allowed amount
The amount a payer agrees to pay for a service under the contract, before patient responsibility is applied.
Appeal
A formal request that a payer reconsider a denial. Plans have internal levels and, in many cases, an external review.
BAA (Business Associate Agreement)
The HIPAA contract required before a vendor may handle a practice's protected health information.
CARC / RARC
Claim Adjustment Reason Codes and Remittance Advice Remark Codes: the standard codes payers use on remittances to explain adjustments and denials.
Clean claim
A claim with no errors that can be adjudicated without additional information.
Clearinghouse acceptance report
The clearinghouse's record that a claim was accepted and forwarded; the primary proof of timely filing.
Contingency fee
A fee calculated as a percentage of money actually recovered, owed only when the payer pays.
Coordination of benefits (COB)
The rules that decide which plan pays first when a patient has more than one.
Corrected claim
A resubmission that replaces the original (frequency code 7) and keeps the original filing date.
Days in A/R
Total A/R divided by average daily charges; a measure of how long it takes to get paid.
Denial
A payer's refusal to pay a claim or line, stated with a reason code.
EOB / ERA (835)
Explanation of benefits (paper) or electronic remittance advice (the X12 835 transaction) showing what was paid, adjusted, and denied.
External review
An independent review of a plan's final internal denial, available under federal and many state rules.
Global period
The days after a surgery (0, 10, or 90) during which related visits are included in the surgical payment.
Legacy A/R
Receivables left behind by a billing-company change, system migration, or acquisition.
Medical necessity
The payer's determination that a service was reasonable and necessary under its coverage policy.
NCCI edits
CMS's National Correct Coding Initiative: rules on which procedure codes may be billed together.
Prior authorization
Payer approval required before certain services; absence is a leading denial reason.
Recovery opportunity report
MARR Partners' audit deliverable: aging buckets, actionable balance, denial categories and paths, payer concentration, deadline claims, and an estimated recovery range.
Retro-authorization
An authorization requested after the service, allowed by some payers in limited circumstances.
Timely filing limit
The deadline by which a claim must reach the payer; Medicare's is one calendar year from the date of service.
Underpayment
A payment below the contracted allowed amount.
Write-off
Removing a balance from A/R, either as a contractual adjustment or as uncollectible. Should always carry a reason.