Medical Billing Language: Acronyms, Codes, Terminology

Medical Billing Language: Acronyms, Codes, Terminology
Whether you’re new to medical billing or looking for a terminology refresher, you’re at the right post. Here, we created a medical billing and coding terminology list that you can use for your own reference or as additional training material for your staff.
Aside from that, we will also discuss who uses them and why they are crucial for you to know. This way, you’ll have a better understanding of the medical billing field if you’re interested in starting a career in it or simply trying to get everyone in your practice informed.

Medical billing abbreviations list

There are many revenue cycle management acronyms and it can be challenging to remember all of them if you’re new in the medical billing field. For starters, here are the most important acronyms every healthcare provider should know:

AHIMA or American Health Information Management Association – The AHIMA medical abbreviation is a professional association for health information management (HIM) professionals. AHIMA provides education, resources, and advocacy for its members who work in areas such as medical coding, health information technology, data analytics, and privacy and security of health information.

AOB or Assignment of Benefits – The AOB medical abbreviation is a document signed by a patient that authorizes the healthcare provider to receive payment directly from the insurance company. It allows the provider to bill the insurance company directly instead of waiting for reimbursement from the patient.
BDR or Billing Data Report – The BDR medical abbreviation is a report that provides an overview of billing and reimbursement activities, including claim submissions, denials, and payments. BDRs help healthcare organizations analyze their financial performance and identify areas for improvement.
CARC or Claim Adjustment Reason Code – This is a code that provides information about why a claim was adjusted or denied by an insurance company. CARCs help identify the specific reason for claim denials or adjustments, allowing providers to take appropriate action.
COB or Coordination of Benefits – The COB medical abbreviation is the process of determining which insurance plan is primary and secondary when a patient has multiple coverage.
CMS or Centers for Medicare and Medicaid Services – This is a federal agency that administers the Medicare program and works in partnership with states to administer Medicaid.
CPT or Current Procedural Terminology – The medical abbreviation for CPT represents a set of medical codes healthcare professionals use to describe all the medical, surgical, and diagnostic services they provide.
CVO or Credentialing Verification Organization – The CVO medical abbreviation is an entity that verifies the credentials of healthcare providers, such as their education, licensure, and experience. This is used by insurance companies and healthcare organizations to ensure that providers are qualified to offer services.
EHR or Electronic Health Record –  This is a digital version of a patient’s medical history, including diagnoses, treatments, medications, and test results. EHRs improve accessibility, accuracy, and efficiency in medical documentation and facilitate communication between healthcare providers.
E/M or Evaluation and Management – This is used to bill for physician services based on the complexity of patient encounters.
EOB or Explanation of Benefits – This is a document that insurance companies send, which includes a breakdown of the payment or denial of a claim.
HCC or Hierarchical Condition Category – This is a classification system used in risk adjustment to predict future healthcare costs based on the severity of a patient’s conditions. HCC coding helps insurance companies assess the expected cost of providing care to a specific patient population.
HCPCS or Healthcare Common Procedure Coding System – This is a coding system used to identify medical procedures and services not covered by CPT codes, such as durable medical equipment, prosthetics, and orthotics, among others.
HIPAA or Health Insurance Portability and Accountability Act – This is a federal law that protects the privacy and security of patient health information
ICD or International Classification of Diseases – This is a system used to classify and code diagnoses, symptoms, and procedures for the purpose of medical records and billing.
NPI or National Provider Identifier – This is a unique 10-digit identification number assigned to healthcare providers by the Centers for Medicare and Medicaid Services (CMS). This ID allows healthcare providers to send information electronically much faster and easier.
PHI or Protected Health Information – Any individually identifiable health information that is protected under HIPAA (Health Insurance Portability and Accountability Act). PHI includes patient names, addresses, social security numbers, medical records, and other personal health data.
POS or Place of Service – This is a code that indicates where a healthcare service was provided, such as a hospital, clinic, or physician’s office.
PPO or Preferred Provider Organization – A type of health insurance plan that allows patients to choose from a network of preferred providers at a reduced cost.
RARC or Remittance Advice Remark Code – This is a code that provides additional explanation or clarification regarding a claim adjustment or denial. RARCs provide detailed information about claim processing issues, helping providers understand why a claim was denied or adjusted.

More medical terminologies for billing and coding

Aside from the medical billing and coding codes above, you should also be aware of the following:


Adjudication refers to the process of reviewing and determining the validity and appropriateness of a healthcare claim. It involves verifying the patient’s eligibility for coverage, evaluating the services provided, and calculating the amount payable by the insurance company.

Claim Denial

A claim denial occurs when an insurance company refuses to pay for a healthcare service or procedure. Denials can happen due to various reasons such as incomplete documentation, lack of medical necessity, or exceeding coverage limits.

Clean Claim

A clean claim is a healthcare claim that is free from errors or omissions and can be processed promptly without additional information or documentation. Submitting clean claims reduces the chances of delays or denials in reimbursement.

Coordination of Benefits (COB)

Coordination of Benefits (COB) is one of the widely used medical billing and coding terms, which refers to the process by which multiple insurance plans determine their respective responsibilities for covering a patient’s healthcare expenses when they are covered under more than one policy. COB ensures that total payments do not exceed the actual cost of services.


A co-payment (co-pay) is a fixed amount that patients are required to pay out-of-pocket at the time of receiving healthcare services. It is typically a small percentage of the total cost and varies depending on the insurance plan.


Downcoding refers to the practice of assigning a lower-level code than originally submitted by a healthcare provider for reimbursement. This can occur if the documentation does not support the level of service billed or if there are discrepancies in coding guidelines.

E&M Guidelines

Evaluation and Management (E&M) guidelines provide specific criteria for determining the appropriate level of service when billing for physician encounters with patients. These guidelines consider factors such as history, examination, medical decision-making, and time spent with the patient.

Fee Schedule

A fee schedule is a predetermined list of fees established by insurance companies or government programs that dictate the maximum allowable reimbursement for specific healthcare services. Providers must adhere to these fee schedules when billing for their services.

Medicare Part A

Medicare Part A is one of the components of the U.S. government’s Medicare program. It provides coverage for inpatient hospital services, skilled nursing facilities, hospice care, and some home healthcare services. Part A is funded through payroll taxes and has specific payment rules and guidelines.

Medicare Part B

Medicare Part B is another component of the Medicare program that covers outpatient medical services, including doctor visits, preventive services, laboratory tests, durable medical equipment, and some home healthcare services. Part B requires payment of monthly premiums by beneficiaries.


Pre-authorization is the process of obtaining approval from an insurance company before providing certain healthcare services or procedures. Insurance companies may require pre-authorization for high-cost treatments or specialized services to ensure medical necessity.


A superbill is a detailed invoice that contains the codes and descriptions for all services provided during a patient encounter. It serves as a reference document for medical coders to accurately assign appropriate codes for billing purposes.

Wrapping Up

The glossary of medical billing terms above includes only a few of the hundreds of terminologies used in the revenue cycle. While these medical billing and coding abbreviations can be tricky to remember, they play a crucial role in the exchange of information between healthcare providers, payers, and patients.
If you want to skip the hassle of this jargon, you can leave the work to professionals like Med Financial Solutions. Our team of medical billing professionals will handle all these terms for your practice, ensuring that you won’t miss any important codes.
We will also provide you with comprehensive medical billing reports, so you’ll have an intuitive interpretation of your practice’s finances.
Once you’re ready to bring these benefits to your practice, don’t hesitate to contact us today!
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