Terminology & Standards

Revenue Cycle Management Glossary

Essential definitions for EDI standards, denial adjudication codes, and payer compliance rules.

EDI Standards

835 Electronic Remittance Advice (ERA)

The HIPAA-standard electronic data interchange (EDI) format used by health insurance payers to communicate claim payment decisions, deductibles, co-pays, and CARC/RARC denial reason codes to healthcare providers.

Operational Impact: RecoupOps ingests 835 files directly to identify and classify every denial instantly upon clearinghouse transmission.
Related:837 Claim File · CARC Codes · RARC Codes
Denial Classification

Claim Adjustment Reason Code (CARC)

Standardized national code set maintained by X12 that explains why a claim or service line was paid differently than billed, or denied in full (e.g. CO-197 for prior authorization).

Operational Impact: CARC codes determine the primary clinical and administrative dispute strategy in appeal drafting.
Related:RARC Codes · Remittance Advice Remark Codes · Group Codes (CO/PR)
Healthcare Regulation

CMS-0057-F Final Rule

The CMS Interoperability and Prior Authorization Final Rule enacted in 2024, requiring Medicare Advantage, state Medicaid MCOs, and ACA Marketplace insurers to publicly disclose standard prior-authorization approval, denial, and overturn rates starting in 2026.

Operational Impact: Provides published federal data demonstrating that over 67% of Medicare Advantage prior-auth denials are overturned upon appeal.
Related:Prior Authorization · Medicare Advantage · KFF Benchmarks
Payer Operations

Coordination of Benefits (COB)

The process by which multiple health insurance plans determine which insurer pays first (primary) and which pays remaining eligible balances (secondary/tertiary).

Operational Impact: CO-22 denials occur when payers dispute primary responsibility, requiring automated secondary EOB routing.
Related:Primary Payer · Secondary Remittance · CO-22
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