On your first day in a US healthcare process, you will hear a stream of words that sound like a new language: "Check the EOB, it’s a CO-45, write it off. The PR-2 goes to the patient. Timely filing is 90 days for this payer, so appeal before Friday."
Interviewers know this, so they test whether you understand the basic vocabulary. This glossary explains the terms you are most likely to hear in interviews and in your first weeks, in plain English, grouped by topic so they make sense together.
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How to use this glossary: don’t try to memorise everything in one go. Read one section a day, and for each term, say aloud one sentence explaining it with an example. That is exactly how interviewers expect you to answer.
People and organisations
| Term | Meaning |
|---|---|
| Provider | The doctor, hospital, clinic, lab or other organisation that gives care and bills for it |
| Payer / carrier | The organisation that pays for care, usually an insurance company or a government programme |
| Patient / member / subscriber | The patient receiving care; "member" is the payer’s word for an insured person; the "subscriber" is the main policyholder |
| Medicare | US federal health programme mainly for people aged 65 and over and some people with disabilities |
| Medicaid | Joint federal and state programme for people with low income; rules vary by state |
| Commercial insurance | Private health plans, often provided through employers |
| Clearinghouse | A company that checks claims and passes them electronically between providers and payers |
| Billing company | A company (often with teams in India) that handles RCM work for providers |
Coverage and patient costs
| Term | Meaning |
|---|---|
| Eligibility | Whether the patient’s insurance is active on the date of service |
| Benefits | What the plan covers and how much the patient pays |
| Deductible | The amount the patient pays each year before the plan starts paying for most services |
| Copay | A fixed amount the patient pays for a service, such as a doctor visit |
| Coinsurance | A percentage of the cost the patient pays after the deductible |
| Out-of-pocket maximum | The most a patient pays in a plan year; after that the plan pays covered services in full |
| In-network / out-of-network | Whether the provider has a contract with the payer; out-of-network usually means higher patient costs or no coverage |
| COB (coordination of benefits) | Rules deciding which plan pays first when a patient has more than one insurance |
| Primary / secondary insurance | The plan that pays first, and the plan that may pay part of what remains |
Codes and forms
| Term | Meaning |
|---|---|
| ICD-10-CM | Diagnosis codes describing the patient’s condition (for example, a code for type 2 diabetes) |
| CPT | Codes for procedures and services performed by providers, maintained by the American Medical Association |
| HCPCS Level II | Alphanumeric codes for supplies, equipment, drugs and some services |
| Modifier | Two characters added to a CPT or HCPCS code to give more detail, such as a separate procedure or which side of the body |
| CMS-1500 | The claim form (or its electronic equivalent) used by individual providers and clinics |
| UB-04 | The claim form (or electronic equivalent) used by hospitals and institutions |
| NPI | National Provider Identifier: a unique 10-digit number for each provider |
| Tax ID (TIN) | The provider’s tax identification number, often needed when calling payers |
| Place of service (POS) | A code showing where the service happened, such as office or inpatient hospital |
| Date of service (DOS) | The date the care was given |
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Claims and payments
| Term | Meaning |
|---|---|
| Claim | The bill sent by the provider to the payer for services |
| Clean claim | A claim with no errors that can be processed without extra information |
| Rejection | A claim returned before processing because of errors (for example a wrong member ID); it is corrected and resent |
| Denial | A claim the payer processed but refused to pay, with a reason code |
| Adjudication | The payer’s process of reviewing a claim and deciding what to pay |
| Allowed amount | The maximum the payer considers for a service under the contract |
| Contractual adjustment / write-off | The difference between the provider’s charge and the allowed amount that the provider cannot bill |
| EOB (explanation of benefits) | A statement explaining how a claim was processed: paid, adjusted, patient responsibility |
| ERA (electronic remittance advice) | The electronic version of the payment explanation sent to providers (the 835 transaction) |
| EFT | Electronic funds transfer: the payment itself, sent to the provider’s bank |
| Payment posting | Recording payments and adjustments against each claim |
Follow-up and denials
| Term | Meaning |
|---|---|
| AR (accounts receivable) | Money owed to the provider that has not yet been collected |
| AR ageing | How long claims have been unpaid, grouped into buckets such as 0–30, 31–60, 61–90 and 90+ days |
| Timely filing limit | The deadline to submit a claim after the date of service; it varies by payer |
| Appeal | A formal request asking the payer to reconsider a denied claim |
| Reconsideration | A request to review a claim, often the first level of appeal |
| CARC | Claim Adjustment Reason Code: explains why a claim or line was adjusted (for example CO-45, PR-1) |
| RARC | Remittance Advice Remark Code: extra detail explaining the adjustment |
| Group codes CO / PR / OA / PI | CO = contractual obligation (provider writes off), PR = patient responsibility, OA = other adjustment, PI = payer-initiated reduction |
| Call reference number | A number the payer’s representative gives for each call; always note it |
| Medical records request | The payer asks for documentation before paying |
Prior authorization and compliance
| Term | Meaning |
|---|---|
| Prior authorization / pre-auth | Payer approval required before certain services |
| Medical necessity | Whether a service is reasonable and needed for the patient’s condition according to the payer’s rules |
| Referral | A primary care doctor’s approval for a patient to see a specialist, required by some plans |
| HIPAA | The US law that protects patients’ health information |
| PHI | Protected health information: any health information that can identify a patient |
Next steps: read how the full RCM cycle works and how denials are managed.
Frequently Asked Questions
What is the difference between EOB and ERA?
Both explain how a claim was processed. An EOB is usually a paper or PDF statement; an ERA is the electronic remittance advice sent to providers, which billing systems can post automatically.
What is the difference between a deductible, copay and coinsurance?
The deductible is what the patient pays before the plan pays most services; a copay is a fixed amount per service; coinsurance is a percentage of the cost after the deductible.
What is the difference between a rejection and a denial?
A rejection is returned before processing because of errors and is corrected and resent. A denial is processed by the payer but not paid, and may need correction or an appeal.
What is timely filing?
The deadline for submitting a claim after the date of service. Each payer sets its own limit, and late claims are usually denied.
What does CO and PR mean on an EOB?
CO means contractual obligation, an amount the provider must write off. PR means patient responsibility, an amount that can be billed to the patient.
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