Medical Coding Glossary
Plain-language definitions of the terms coders, billers, auditors and revenue-cycle teams use every day. Terms with in-depth explanations link to their own page.
A
- AAPC
- A U.S.-based professional association for medical coders, billers, auditors and compliance professionals that issues credentials such as the CPC.
- ABN (Advance Beneficiary Notice of Noncoverage)
- A Medicare notice (form CMS-R-131) given to an Original Medicare beneficiary before a service that may be denied as not reasonable and necessary, allowing the provider to bill the beneficiary if Medicare denies.
- Accounts Receivable (A/R)
- Money owed to a provider for services already delivered — by payers and patients — that has not yet been collected. Full explanation →
- AHIMA (American Health Information Management Association)
- A professional association for health information professionals that issues credentials such as the CCS, CCS-P, CDIP and RHIA, and co-publishes coding and query practice guidance.
- APC (Ambulatory Payment Classification)
- The grouping system Medicare uses to pay hospital outpatient services under the Outpatient Prospective Payment System (OPPS); services in the same APC are clinically similar and have similar costs.
C
- CARC (Claim Adjustment Reason Code)
- A standard code on a remittance (835/ERA) that explains why a claim or service line was paid differently than billed. Full explanation →
- CDI (Clinical Documentation Improvement)
- A program in which specialists review health records and query providers so documentation is complete, accurate, specific and clinically supported.
- CMS (Centers for Medicare & Medicaid Services)
- The federal agency within HHS that administers Medicare, Medicaid and CHIP, sets Medicare payment rules, and maintains ICD-10-PCS, HCPCS Level II and NCCI.
- CPT (Current Procedural Terminology)
- The code set, owned and maintained by the American Medical Association, used to report medical, surgical and diagnostic procedures and services. CPT® is a registered trademark of the AMA.
D
- DRG (Diagnosis-Related Group (MS-DRG))
- A classification that groups inpatient hospital stays with similar clinical characteristics and resource use; Medicare pays most acute inpatient stays by MS-DRG. Full explanation →
E
- EOB (Explanation of Benefits)
- A statement a health plan sends to a member explaining what was billed, what the plan paid, and what the member may owe. Providers receive a remittance advice instead.
- ERA (Electronic Remittance Advice)
- The electronic explanation of payment a payer sends a provider, using the X12 835 transaction, listing paid, adjusted and denied services with CARC/RARC codes.
H
- HCC (Hierarchical Condition Category)
- A group of related diagnosis codes with similar expected cost, used in risk adjustment models such as the CMS-HCC model for Medicare Advantage. Full explanation →
- HCPCS (Healthcare Common Procedure Coding System)
- The two-level U.S. procedure code system: Level I is CPT; Level II, maintained by CMS, covers supplies, drugs, DME, ambulance and other items and services.
- HIPAA (Health Insurance Portability and Accountability Act)
- The 1996 federal law whose rules set privacy and security standards for protected health information and require standard transactions and code sets.
I
- ICD-10-CM (International Classification of Diseases, 10th Revision, Clinical Modification)
- The U.S. diagnosis code set, maintained by NCHS/CDC and updated each fiscal year on October 1.
- ICD-10-PCS (International Classification of Diseases, 10th Revision, Procedure Coding System)
- The U.S. procedure code set for hospital inpatient services, maintained by CMS and updated each fiscal year on October 1.
- ICD-11 (International Classification of Diseases, 11th Revision)
- The WHO's current revision of the ICD, in effect for WHO reporting since January 1, 2022; not adopted for U.S. morbidity coding.
L
- LCD (Local Coverage Determination)
- A coverage decision by a Medicare Administrative Contractor that defines when a service is reasonable and necessary within that contractor's jurisdiction. Full explanation →
M
- MAC (Medicare Administrative Contractor)
- A private contractor that processes Medicare fee-for-service claims for a geographic jurisdiction and issues local coverage determinations.
- MUE (Medically Unlikely Edit)
- An NCCI edit that sets the maximum units of a code a provider would report for one patient on one date of service in most circumstances.
N
- NCCI (National Correct Coding Initiative)
- CMS's program of automated edits — procedure-to-procedure edits and medically unlikely edits — that prevent improper payment for code combinations and units. Full explanation →
- NCD (National Coverage Determination)
- A nationwide Medicare coverage decision issued by CMS describing whether and when an item or service is covered.
R
- RAF (Risk Adjustment Factor)
- A member's risk score in a risk adjustment model — the sum of demographic factors, HCC coefficients and interactions — used to scale plan payment. Full explanation →
- RARC (Remittance Advice Remark Code)
- A standard code that adds explanatory detail to a CARC on a remittance — for example, identifying missing information or a specific policy.
- RCM (Revenue Cycle Management)
- The processes that turn patient care into collected revenue, from scheduling and registration through coding, billing, payment and collections.
- RVU (Relative Value Unit)
- The measure Medicare uses under the Physician Fee Schedule to value services, combining work, practice expense and malpractice components. Full explanation →
0-9
- 835 (X12 835 Health Care Claim Payment/Advice)
- The HIPAA standard electronic transaction payers use to send remittance advice — payment and adjustment details — to providers.
- 837 (X12 837 Health Care Claim)
- The HIPAA standard electronic claim transaction: 837P for professional, 837I for institutional and 837D for dental claims.