The terms, defined plainly

Accounts receivable (AR)

Money billed and not yet collected. In a practice it is usually reported in ageing buckets — 0-30, 31-60, 61-90, 90+ days — because the older a balance is, the less likely it is ever to be paid.

Days in AR

Average number of days between billing and collection. Calculated as total AR divided by average daily charges. Under 40 days is strong for most specialties; over 60 usually means nobody is calling on the aged end.

Clean claim rate

The share of claims accepted on first submission with no edit, rejection or denial. Every point below about 95% is rework somebody has to pay for.

First pass resolution rate

The share of claims paid on the first submission. Different from clean claim rate, which only measures acceptance rather than payment.

CARC

Claim Adjustment Reason Code. The standard code on a remittance explaining why a line was adjusted or denied, such as CO-197 for a missing authorization.

RARC

Remittance Advice Remark Code. The supplementary code that carries the actual detail when the CARC is generic. CO-16 without its RARC is not actionable.

Group code

The two-letter prefix on a remittance line, chosen by the payer at adjudication. CO is a contractual obligation you write off and may not bill to the patient. PR is patient responsibility and is billable. OA is another adjustment, usually pointing at a different payer. PI is a payer-initiated reduction. The prefix is not part of the reason code — the same CARC arrives under different groups depending on payer and circumstance, so read the remittance rather than assuming from a guide title.

NCCI edits

National Correct Coding Initiative edits. CMS-published pairs of codes that should not normally be billed together, and whether a modifier is permitted to override the pair.

LCD and NCD

Local and National Coverage Determinations. Medicare policies stating when a service is covered. An appeal that does not quote the applicable determination usually fails.

Prior authorization

Payer approval obtained before a service is delivered. Distinct from pre-certification and referral, though the words are often used interchangeably by front desks and never by payers.

Retro-authorization

An authorization requested after the service was delivered. Many payers allow it inside a short window, sometimes as little as 72 hours, and many do not allow it at all.

Eligibility verification

Confirming a patient’s active coverage, plan type, benefits and patient responsibility before the visit. The cheapest denial prevention available.

Coordination of benefits (COB)

The rules deciding which payer is primary when a patient has more than one plan. A stale COB record on the payer’s file will stop every claim until it is corrected.

Timely filing limit

The deadline for submitting a claim, set by contract. Ranges from 90 days to 365 depending on the payer, and missing it is usually terminal.

Credentialing

Verifying a provider’s qualifications so they can be enrolled with a payer. Distinct from enrollment, though the two are done together and usually spoken of as one thing.

Revalidation

Periodic re-verification of an existing enrollment. Missing a revalidation deadline can suspend payment on every claim behind it, which makes it the most expensive administrative deadline in a practice.

CAQH

The shared credentialing database most commercial payers pull from. If a CAQH profile goes stale or unattested, enrollments start failing quietly.

PECOS

Medicare’s provider enrollment system. Enrollment status and effective dates live here, and the effective date is what determines which claims are recoverable after a lapse.

Charge entry

Getting the services performed into the billing system as billable lines. Errors introduced here are cheap to fix and expensive to find later.

Write-off

A balance removed from AR without collection. Contractual write-offs are expected; everything else is a loss that should be counted and explained.

Underpayment

A claim paid at less than the contracted rate. Hides easily inside routine CO-45 adjustments because the code looks normal.

Davis-Bacon Act

The federal law requiring prevailing wages on federally funded construction contracts, and with it weekly certified payroll reporting.

Prevailing wage

The wage and fringe benefit rate that must be paid for a given classification on a public works job in a given locality, set by a wage determination.

Certified payroll

The weekly payroll report a public works contractor must file, listing each worker, classification, hours, rate and fringe benefits, signed under a statement of compliance.

WH-347

The US Department of Labor form used for federal certified payroll. Most states run their own portal in addition to it.

Wage determination

The published schedule of prevailing wage rates by classification and locality that applies to a specific public works contract.

Fringe benefits

The benefit portion of a prevailing wage obligation. It can be paid as bona fide benefits or as cash in lieu, and calculating it wrongly is, in our experience, one of the commonest certified payroll rejections.

Statement of compliance

The signed declaration on a certified payroll filing that the payroll is correct and that prevailing wages were paid. It carries personal legal weight, which is why the contractor signs and not the vendor.

Denial codes explained one by one →

If this is work somebody on your team is doing at four in the afternoon, it can be a seat.