The behavioral health billing glossary

A Section 1115 waiver is a federal approval that lets a state Medicaid program test policies that differ from normal Medicaid rules, often including special behavioral health and SUD demonstrations. A waiver sets state specific rules for who is covered, which services are covered, and how providers get paid.

A 270/271 eligibility transaction is the standard HIPAA electronic inquiry and response that checks a patient's coverage, benefits, and patient responsibility with a health plan. The 270 request is sent by the provider or clearinghouse and the 271 response is returned by the payer or benefit administrator.

42 CFR Part 2 is the federal confidentiality rule that controls how substance use disorder treatment records are used and disclosed, separate from and stricter than HIPAA. The rule sets conditions for sharing SUD information with payers, courts, family, and other providers, and violations carry legal and financial risk.

An 837 Claim Transaction is the HIPAA-standard electronic claim format used to submit professional, institutional, and dental claims to payers. The 837 file carries patient, provider, diagnosis, and service-line data from the practice management or billing system through the clearinghouse to the health plan.

Accounts Receivable (AR) is the total amount owed to a treatment center by payers and patients for services that have been billed but not yet collected. AR is usually tracked by aging bucket, payer, and financial class to manage cash flow and collection risk.

Allowed amount is the maximum dollar value a payer will consider for a covered service, based on the benefit plan and any contract, before patient cost sharing and contractual write-offs. Allowed amount sits between your gross charge and the actual payment, and drives both payer reimbursement and patient responsibility.

An AR aging report is a breakdown of unpaid balances by how long they have been outstanding, usually in 0-30, 31-60, 61-90, and 90+ day buckets. The report is used to monitor collections performance, spot problem payers, and prioritize follow up on unpaid behavioral health claims and patient balances.

ASAM Criteria and Levels of Care are a nationally used clinical framework that defines severity and standardized levels of addiction treatment, from early intervention through intensive residential services. Payers and regulators rely on ASAM levels to set medical-necessity, prior-authorization, and coverage rules for substance use disorder services.

Assignment of benefits is the patient's written authorization that allows a health plan to pay the provider directly instead of reimbursing the patient. Assignment of benefits is usually captured as part of intake paperwork or in the signature-on-file fields of the claim.

Authorization denial is a payer decision to deny some or all claim lines because required prior authorization, precertification, or continued-stay approval was missing, expired, exceeded, or not documented correctly. Authorization denial can be technical, administrative, or clinical and often uses CARC codes such as CO-197 or CO-50.

Authorization span and units refer to the approved date range and quantity of services (days, visits, hours, or units) that a payer has authorized for a specific level of care or service. Authorization span controls when care is covered, and authorized units control how much care is covered before new approval is required.

Bad debt is patient or payer responsibility that remains unpaid after reasonable collection efforts and is written off as uncollectible. The bad debt rate metric measures the share of revenue lost to bad debt over a defined period.

Balance billing is the practice of billing a patient for the difference between a provider's charge and the payer's allowed amount or covered benefit. Balance billing is often limited or prohibited by payer contracts, Medicare and Medicaid rules, and surprise billing laws.

Batch eligibility check is an automated process that submits eligibility inquiries for many patients at once, usually via EDI 270 transactions, and returns coverage details via 271 responses. Batch runs are typically tied to a schedule or census file so coverage issues are caught before services are delivered or billed.

Benefit period is the defined span of dates during which a member's benefits are active and cost sharing and limits apply, such as a calendar year, plan year, or episode-based window for a specific service. Benefit period boundaries control when deductibles reset, when visit limits renew, and when benefits are considered exhausted.

Benefits exhausted means a patient has reached the dollar, visit, or day limit the health plan will cover for a certain service or time period, so new claims for that service are not payable. The denial is about benefit limits, not coding errors or missing authorization.

Benefits verification is the process of confirming a patient’s active coverage, financial responsibility, and authorization requirements with the payer before services are rendered. VOB can be manual (phone, fax, portal) or electronic (eVOB using 270/271 transactions or integrated portals).

Billable units are the quantity of a service reported on a claim line, based on the unit definition for that CPT or HCPCS code and the payer's rules. Correct billable units link the clinical work performed to the amount a payer will consider for reimbursement.

A billing modifier is a 2-character code appended to a CPT or HCPCS code to describe a special circumstance, professional role, or delivery method that affects how payers process and pay a claim line. Billing modifiers do not change the underlying service, but they can change coverage, rate, or audit risk.

Bundling and unbundling describe how payers group multiple services into a single reimbursable unit or separate them into individually payable line items based on coding and medical policy. Correct handling of bundling logic prevents avoidable denials, underpayments, and audit exposure.

Capitation is a payment model where a payer pays a fixed amount per member per month to a provider or network, regardless of how many services that member actually uses. Behavioral health providers still submit encounters or claims, but payment is tied to the covered population, not to each individual service.

A behavioral health carve-out is a health plan design where mental health and substance use benefits are administered and paid by a separate company or division instead of the main medical payer. Behavioral claims must be verified, authorized, and billed to the carve-out entity, not the medical plan, or they will deny.

Case rate is a fixed payment amount that a payer agrees to pay for a defined episode or bundle of care, regardless of the number of individual services provided within that episode. Case rates sit between fee-for-service and capitation and are defined in the payer contract by service type, time window, and inclusions or exclusions.

A Certified Community Behavioral Health Clinic (CCBHC) is a provider organization that meets federal standards for delivering a defined set of coordinated behavioral health services and receives specialized Medicaid funding or grants tied to that status. CCBHCs are certified by states or tribes and often paid under prospective or enhanced rates that change how services must be billed and reported.

Charge capture is the process of turning documented clinical services into billable charges with the right codes, units, and dates so claims can be submitted and paid. Accurate charge capture connects clinical work to revenue and prevents missed, underbilled, or noncompliant charges.

Charge lag is the delay between when a service is provided and when the charge is entered or released to billing. Charge lag tracks how long revenue sits unbilled, which directly impacts cash flow and timely filing risk.

Chargemaster (CDM) is the master list of all billable services, supplies, and room-and-board charges with their internal codes, CPT/HCPCS, revenue codes, and prices. Chargemaster data feeds every facility claim and drives what shows up on the UB-04 and the 837I.

Charity care is free or discounted services granted to patients who meet a documented financial-assistance policy, with the unpaid balance recorded as charity instead of bad debt. Charity care applies after eligibility screening and does not create a collectible patient balance.

Claim Adjustment Reason Code (CARC) is a standardized code set defined by X12 that explains why a claim line or payment amount was adjusted on an electronic remittance (835) or paper remit. Each CARC provides the payer's specific reason for nonpayment, partial payment, or a financial adjustment.

A claim edit is an automated rule that checks claim data for errors, missing elements, or policy conflicts before or during payer adjudication. Claim edits fire as warnings or hard stops and must be resolved for a claim to pay correctly.

Claim frequency code is a one-character value on an institutional or professional claim that indicates whether the claim is an original, a corrected/replacement, or a void/cancel claim. Claim frequency code tells the payer why the claim is being submitted now in the claim lifecycle.

Claim lag is the number of days between the date of service (or discharge) and the date a claim is submitted to the payer. Claim lag is usually tracked as an average or distribution to show how quickly a billing team turns encounters into submitted claims.

Claim rejection is a failure of an electronic claim at the clearinghouse or payer front-end edit level so the claim never enters formal adjudication and does not generate an EOB or remittance. A rejected claim must be corrected and resubmitted, not appealed, and usually is not in accounts receivable yet.

Claim scrubbing is the automated and manual review of claims before submission to catch errors, missing data, and payer-specific issues that would cause rejections or denials. Claim scrubbing applies standardized and custom rules to claims so that the payer receives a clean, payable claim on the first pass.

Claim status inquiry (276/277) is the standard HIPAA EDI transaction pair used for asking a payer about the status of a submitted claim and receiving a structured response. The 276 is the provider's electronic request and the 277 is the payer's electronic status response.

Claims adjudication is the payer's internal process of reviewing a submitted claim, applying benefits and contract rules, and deciding whether to pay, deny, or pend each line. Claims adjudication produces the payment amounts, denial codes, and patient responsibility that show up on the remittance advice and EOB.

A claims appeal is a formal request that asks a payer to review and change a denial, reduction, or recoupment on a processed claim. A claims appeal uses additional information, clinical documentation, or contract terms to argue that the original payment decision was incorrect.

Clean Claim Rate is the percentage of submitted claims that pass payer and clearinghouse edits and can be paid without correction. The metric tracks how many claims are accepted on the first pass, with no rework needed.

A clearinghouse is a third-party EDI intermediary that receives electronic claims, checks and reformats them, then forwards them to payers and returns electronic responses. A clearinghouse often also handles eligibility checks, electronic remittances, and claim status transactions between providers and payers.

Clinical documentation improvement (CDI) is a structured process to make provider notes more complete, specific, and accurate so that coding, billing, and medical necessity support match the care delivered. CDI work reduces denials, audit risk, and revenue loss tied to poor or vague documentation.

CMS-1500 is the standard paper claim form used by individual and group practitioners to bill professional services, typically submitted electronically as the 837P transaction. Behavioral health providers use CMS-1500 for outpatient therapy, medication management, and most non-facility services.

Collaborative care codes are a group of time based CPT and HCPCS codes used to bill psychiatric collaborative care management services delivered in primary care and other medical settings. Collaborative care codes pay for a care team model that includes a treating practitioner, a behavioral health care manager, and a consulting psychiatrist working together over a calendar month.

A collections agency is a third-party vendor that pursues overdue patient balances or bad debt accounts that a provider has not been able to collect internally. Behavioral health practices typically use collections agencies for self-pay after insurance, copays, coinsurance, and non-covered services that remain unpaid after internal billing efforts.

A commercial payer is a private health insurance company or employer-sponsored health plan that pays for services, as opposed to government programs like Medicare or Medicaid. Commercial payers include fully insured and self-funded plans, often administered by national carriers or third-party administrators.

Concurrent review is the payer's medical-necessity and authorization check that happens during an active episode of care, usually to decide whether to extend or stop approved days or units. In behavioral health it often controls continued coverage for inpatient, residential, PHP, IOP, and sometimes outpatient sessions.

Continued stay review (CSR) is a payer-required clinical and utilization review used to decide whether days or units beyond the initial authorization will be approved. CSR determines if a patient can remain at the same level of care, step down, or be denied further covered days.

Contract negotiation with a payer is the process a provider uses to set rates, terms, and billing rules in a written agreement for covered services. Contract outcomes drive allowed amounts, denial patterns, and cashflow for behavioral health programs.

Contractual adjustment is the portion of a provider's billed charges that is contractually not payable under a payer agreement and is written off as a permanent reduction in expected reimbursement. Contractual adjustments separate true disallowed amounts from collectible patient responsibility and prevent overstated accounts receivable.

Coordination of benefits (COB) is the process payers use to decide which plan pays first when a patient has more than one active policy, and how the remaining balance can be billed to other coverage. Coordination of benefits affects claim routing, payment order, and how much a behavioral health provider can collect from each payer and from the patient.

Copay collection is the process of identifying, communicating, and collecting the fixed copayment amount a patient owes under the health plan at each visit or service. Copay collection usually happens before or at the time of service, and directly affects net collections and patient experience.

A corrected claim is a resubmission of a previously accepted claim that replaces the original with updated information, using payer-specific correction indicators rather than being sent as a new or appealed claim. Corrected claims are used when the provider was at fault for a billing or data error that affected how the claim adjudicated.

Cost sharing is the portion of allowed charges a member is contractually required to pay, usually as a copay, coinsurance, or deductible. Cost sharing is separate from non-covered amounts and directly drives patient-responsibility collection and financial counseling.

Cost to collect is the total revenue-cycle expense required to bring in one dollar of patient service cash. The metric is usually expressed as a percentage of cash collected or net patient service revenue.

A CPT code is a standardized five-character code that describes medical, surgical, and diagnostic services for billing and reporting. Behavioral health claims use CPT codes to describe services like therapy, psychiatry, and evaluation services so payers know what was done and how to pay it.

Credentialing is the process payers and facilities use to verify a provider's qualifications, enroll them, and approve them to see members. Credentialing must be complete and current before most behavioral health services can be billed and paid as in-network.

Credit balance is the dollar amount where payments and adjustments on patient or payer accounts exceed the charges, creating a negative balance that your organization owes back to a payer or patient. As a metric, credit balance is usually tracked as a total dollar amount and as a percentage of accounts receivable.

Days in AR (A/R Days) measures how many days of net charges remain unpaid in accounts receivable, based on current AR and recent charging volume. The metric shows how quickly a practice or facility converts billed charges into cash.

A deductible is the amount a patient must pay for covered services each benefit period before the health plan starts paying its share. The deductible amount is set by the insurance policy and usually resets on a calendar or plan year.

Denial management is the end-to-end process of preventing, identifying, correcting, and appealing claim denials to protect revenue and reduce avoidable write-offs. It combines technical claim corrections with root-cause work to stop repeat denials at the payer, provider, and workflow level.

Denial rate is the percentage of submitted claims that are denied by payers during a defined period. The metric can be calculated based on claim counts or dollar amounts and is usually reported at first submission or across the full claim lifecycle.

Dual eligibility means a patient is enrolled in both Medicare and Medicaid at the same time, with Medicare as primary and Medicaid as payer of last resort. Medicaid may cover Medicare premiums, cost sharing, and extra services, depending on the state and the dual category.

Duplicate claim denial is a payer decision that a submitted claim or service line is a repeat of a previously received claim. The payer uses a denial code such as CARC CO-18 to indicate that the claim will not be paid again because an original claim is already on file or processed.

Electronic data interchange is the standard way healthcare organizations send and receive billing and administrative data, such as claims and remittances, in machine-readable formats. EDI in the U.S. uses HIPAA X12 transaction standards for files like 837 claims, 835 remittances, and 270/271 eligibility.

Electronic Funds Transfer (EFT) is an electronic payment method where payers deposit claim payments directly into a provider's bank account instead of issuing paper checks.

Electronic Visit Verification is a system that electronically confirms key details of a home or community-based service visit, such as who provided the service, to whom, where, and for how long. EVV data is used by payers, especially Medicaid and Medicaid MCOs, to validate claims and prevent fraud, waste, and abuse.

Eligibility check is the process of confirming that a patient has active insurance coverage with a specific payer for a specific date of service. It usually uses electronic 270/271 transactions or payer portals to pull coverage and basic benefit information before a claim is sent.

Explanation of Benefits (EOB) is the statement a health plan sends to a member that explains how a claim was processed, what the plan paid, and what the patient may owe. An EOB is not a bill, but it is the member-facing version of the claim outcome that providers see in a remittance advice.

External Review is a formal appeal where an Independent Review Organization (IRO) that is not the payer reviews a denial and issues a binding decision under state or federal rules. External Review typically follows an unsuccessful internal appeal and focuses on medical necessity, coverage rules, and parity compliance.

Facility fee is the portion of a claim that pays the hospital or treatment facility for space, equipment, nursing, and overhead, separate from the clinician's professional fee. Facility fees are typically billed by hospitals or licensed facilities on a UB-04 with revenue codes or facility-level HCPCS codes.

A fee schedule is a payer or contract document that lists the allowed amount the payer will consider for each billed code under specific conditions. In behavioral health, fee schedules often mix per-diem rates, per-session rates, and special rules for modifiers, locations, and levels of care.

Fee-for-service is a payment model where a payer reimburses each covered service separately, usually based on an agreed fee schedule or allowed amount. Behavioral health claims paid under fee-for-service are settled line by line, not as a bundled or capitated payment.

Financial assistance policy is a written document that defines when and how a provider reduces or forgives patient charges based on financial need. The policy governs charity care, sliding-scale discounts, and related write-offs for uninsured or underinsured patients.

First-Pass Resolution Rate (FPRR) is the percentage of claims that are fully resolved on the first submission, with no rework, appeals, or additional touches required. Resolution includes payment as expected or an appropriate zero payment that needs no further follow up.

A good faith estimate (GFE) is a written estimate of expected charges that must be given to uninsured and self-pay patients before non-emergency services. A good faith estimate outlines services, billing codes, and projected patient costs to comply with the No Surprises Act.

Gross collection rate is the percentage of gross charges that are collected as payments, without accounting for contractual adjustments or other write-offs. The metric is calculated by dividing total payments by total gross charges for the same period or cohort.

Group codes are high-level adjustment categories on remittance advice that indicate who is financially responsible for a claim adjustment or denial. The four standard group codes are CO (contractual), PR (patient responsibility), OA (other adjustment), and PI (payer initiated).

Group vs individual therapy billing is the process of coding, documenting, and submitting claims that distinguish between psychotherapy delivered to one patient individually and psychotherapy delivered to multiple patients in a group. Correctly classifying sessions affects CPT code selection, medical necessity review, reimbursement amounts, and audit risk in behavioral health programs.

A HCPCS code is a standardized alphanumeric code used to bill medical procedures, supplies, and services to Medicare, Medicaid, and many commercial payers, especially for non-physician and facility services. Behavioral health programs rely on HCPCS codes for per-diem levels of care, Medicaid-specific services, and many state-defined benefits.

HCPCS H-codes are Level II HCPCS codes (H0001-H2037) used mainly for alcohol and drug services and other behavioral health programs, especially in Medicaid and state-funded settings. H-codes often represent per-diem or bundled services, such as residential, IOP, or withdrawal management, instead of single CPT units.

HIPAA in the billing context refers to the federal rules that govern how protected health information is used, shared, and transmitted for claims, payments, and healthcare operations. HIPAA also sets national standards for electronic billing formats, identifiers, and code sets that every payer and provider is expected to follow.

ICD-10-CM diagnosis codes are standardized diagnosis codes used in the United States to describe patient conditions on claims, clinical documentation, and reporting. ICD-10-CM diagnosis codes drive coverage, medical-necessity decisions, and reimbursement for behavioral health services.

IMD exclusion is a federal Medicaid rule that generally bars federal Medicaid payment for adults in psychiatric or SUD facilities with more than 16 beds. IMD exclusion drives whether residential and inpatient behavioral-health stays are covered or treated as non-payable for Medicaid and many Medicaid MCOs.

In-network vs out-of-network describes whether a provider has a contracted rate and terms with a health plan or bills as a non-contracted provider. Network status drives allowed amounts, patient cost share, authorization rules, and how claims adjudicate.

Incident-to billing is a Medicare billing rule that lets services provided by non-physician staff be billed under a supervising practitioner's NPI at that practitioner's rate when strict requirements are met. Incident-to billing is mainly used in office-based settings and carries significant audit and overpayment risk if requirements are not followed.

Intensive Outpatient Program (IOP) is a structured behavioral health or substance use treatment program that delivers multiple hours of therapy per day, several days per week, while the patient lives at home. IOP is typically billed as a distinct level of care with specific coverage rules, authorization requirements, and service limits.

Level of care criteria are the clinical and utilization rules payers use to decide whether a patient qualifies for a specific treatment intensity, such as inpatient, residential, PHP, IOP, or outpatient. Criteria drive prior authorization, concurrent review, and many medical-necessity and downgrade denials.

Level-of-care denial is a payer decision that treatment was provided at the wrong intensity or setting compared to the plan's criteria, so payment is reduced or denied. In behavioral health this often means the payer says residential, PHP, IOP, detox, or inpatient was not justified when a lower or higher level of care was required.

LOCUS and CALOCUS are structured behavioral-health assessment tools that score clinical severity and support level-of-care decisions for adults (LOCUS) and children and adolescents (CALOCUS). Many Medicaid programs and commercial behavioral-health carve-outs require LOCUS or CALOCUS scoring to justify authorization and payment for specific levels of care.

A Management Services Organization (MSO) is a separate business entity that provides non-clinical services such as billing, RCM, HR, and IT to healthcare practices or treatment centers. An MSO typically centralizes functions across multiple locations or provider groups while clinical care and licensure stay with the practice entity.

MAT billing is the way providers code and bill for medications and related services used to treat opioid and other substance use disorders, often under specialized OTP or SUD benefits. MAT billing must align medication, counseling, labs, and level of care with payer specific rules or claims are denied or recouped.

A Medicaid Managed Care Organization (MCO) is a private or nonprofit health plan that contracts with a state Medicaid agency to deliver Medicaid-covered services to enrolled members, usually for a fixed per-member-per-month payment. In behavioral health revenue cycle, a Medicaid MCO is the billed payer and follows plan-specific coverage, authorization, and billing rules that differ from fee-for-service Medicaid.

Medical loss ratio (MLR) is the percentage of premium revenue a health plan spends on clinical services and quality improvement rather than administration, marketing, or profit. Payers track MLR by product line, and federal and state rules often set a minimum MLR that drives network, utilization review, and rate decisions that hit providers.

Medical necessity is the payer standard that a service must be clinically appropriate, consistent with accepted standards of care, and not primarily for convenience in order to be covered. Medical necessity is defined in federal and state rules and in individual payer policies, and it is the core reason behind many behavioral health authorization requirements and denials.

Medical necessity denial occurs when a payer refuses to pay all or part of a claim because the documented service does not meet that payer's clinical coverage criteria. Medical necessity denial is usually identified by specific CARC and RARC codes and often requires a clinical appeal to overturn.

A medical records request is a payer or auditor request for clinical documentation that supports a specific claim or set of services. The request is usually time bound and nonresponse can trigger denial, recoupment, or audit escalation.

Medically Unlikely Edits are CMS and payer unit-of-service limits for a single HCPCS/CPT code on one date of service for one patient, used to flag quantities that are clinically improbable. MUEs trigger automatic claim line denials or reductions when unit counts exceed the payer's published or internal limit.

Medicare is the federal health insurance program for people 65 and older and certain younger people with disabilities, administered by CMS and paid through regional Medicare Administrative Contractors. Medicare sets national coverage and billing rules that many commercial and Medicaid payers follow, so operational mistakes here ripple across your entire revenue cycle.

A Medicare-Medicaid crossover claim is a claim where Medicare, as the primary payer, automatically forwards its finalized claim and payment information to Medicaid or a Medicaid MCO for secondary payment on a dual-eligible patient. The crossover process is a form of coordination of benefits that is supposed to eliminate separate billing to Medicaid for Medicare cost sharing.

Mental Health Parity and Addiction Equity Act (MHPAEA) is a federal law that requires most group health plans and insurers to provide mental health and substance use disorder benefits on terms comparable to medical-surgical benefits. Mental health parity sets rules for financial requirements and treatment limits that payers must apply no more stringently than they do for physical health care.

National Provider Identifier is a 10-digit, HIPAA-required identification number assigned to health care providers and organizations in the United States. National Provider Identifier is used on claims, eligibility, and authorization transactions so payers can identify who rendered and who billed for services.

An NCCI edit is a CMS coding rule that prevents improper code combinations or units on the same claim, usually by bundling services or denying one of the codes. Many Medicare, Medicaid, and commercial plans load NCCI edits into their claims engines to control unbundling and overbilling.

Net collection rate is the percentage of the revenue you were contractually allowed to collect that you actually collected, after contractual adjustments are removed. Unlike gross collection rate, which divides payments by full billed charges and mostly reflects your pricing, net collection rate isolates how well billing, follow-up and write-off policies turn expected reimbursement into cash.

Network adequacy is the regulatory requirement that a health plan maintain enough in-network providers of each type, within reasonable distance and time, to give members timely access to covered services. Regulators set and enforce these access standards for commercial, Medicare Advantage, and Medicaid managed care plans.

No Surprises Act is a federal law that limits surprise out-of-network billing and sets good faith estimate requirements for uninsured and self-pay patients. The regulation applies to most commercial and employer health plans and creates specific billing and dispute rules for providers and facilities.

Non-covered services are items or treatments that a payer has excluded from the member's benefit plan, so no plan payment is available regardless of medical necessity. Non-covered status is usually indicated on remits with denial or adjustment codes such as CO-96, PR-96, or PR-204 and may or may not be billable to the patient, depending on contracts and law.

Notice of admission is a payer-required notification that a patient has been admitted for care, sent at or shortly after admission so the payer can open a case, start utilization review, and tie future claims to the stay. Notice of admission is separate from prior authorization and is often subject to strict timing rules.

Opioid treatment program bundled payment is a weekly, all-inclusive payment for opioid use disorder treatment billed by certified opioid treatment programs under specific HCPCS G-codes. The bundle typically covers medication, dispensing, counseling, drug testing, and related services for a defined seven‑day episode of care.

Out-of-pocket maximum is the most a member is required to pay in covered cost sharing (deductibles, copays, and coinsurance) during a benefit period before the health plan pays 100 percent of covered allowed charges. The out-of-pocket maximum applies only to covered services and usually resets each plan year.

Overpayment and refund refers to situations where a payer or patient paid more than was owed for a service and the process a provider uses to return those excess funds. Overpayment handling covers payer recoupments, provider-initiated refunds, and related credit balance corrections in the billing system.

Partial Hospitalization Program (PHP) is an intensive, structured outpatient level of care that provides multi-hour psychiatric and behavioral health services during the day as an alternative to inpatient hospitalization. PHP is usually billed as a per-diem or bundled service and has specific coverage, authorization, and documentation rules that strongly affect reimbursement.

A payer contract is the written agreement between a provider or treatment center and a health plan that sets rates, covered services, documentation rules, and operational requirements. The contract controls what the payer will pay, what can be billed, and the conditions for payment, even when benefits show as active.

Payer ID is the electronic identifier used in EDI transactions to route claims, eligibility checks, and remittances to the correct health plan or benefit administrator. Payer ID is usually a 5 to 7 character code that can differ by clearinghouse and by line of business, including behavioral health carve-outs.

Payer mix is the percentage breakdown of a provider's volume or dollars by payer category, such as commercial, Medicaid, Medicare, and self-pay. The metric shows how dependent a program is on each payer type and predicts reimbursement, denial patterns, and cash flow risk.

Payer portal is the secure online website a health plan gives providers to check eligibility, authorizations, claim status, and payment details. Payer portal data often arrives faster and with more context than 835 files or phone calls, so it directly affects days in A/R and denial recovery.

Payment posting is the process of recording payer and patient payments, denials, and adjustments from remittance advice or EOBs into the billing system at the line-item level. Accurate payment posting keeps accounts receivable, contractuals, and patient responsibility aligned with how the payer actually adjudicated the claim.

Peer support billing with H0038 uses the HCPCS H-code for self-help or peer services, typically billed in 15 minute units and covered primarily under Medicaid behavioral health benefits. The code represents services delivered by qualified peer specialists who use lived experience to support members in recovery, subject to strict state and MCO rules on scope, documentation, and supervision.

Peer-to-peer review is a clinician-to-clinician discussion between the treating provider and a payer-employed reviewer to argue for medical necessity, authorization, or level-of-care. Peer-to-peer review is usually time-limited and used to prevent or overturn a denial tied to medical necessity or authorization.

Per diem rate is a fixed daily payment amount that a payer agrees to reimburse for each covered day of a service episode, such as residential or PHP treatment. Per diem reimbursement replaces line-by-line fee schedules with a single daily rate that is governed by contract, authorization, and level of care.

A Place of Service (POS) code is a two-digit code on professional claims that identifies where a service was provided. POS codes drive how payers price claims, apply telehealth rules, and decide if a service is covered.

Point-of-service collections are the payments collected from patients at or before the time of service for their estimated financial responsibility, such as copays, deductibles, and self-pay amounts. Point-of-service collections rely on accurate eligibility and benefits information and directly affect cash flow, bad debt, and patient experience.

Pre-service deposit is money collected from a patient before services start, based on an estimate of the patient's financial responsibility. It is usually applied to deductibles, copays, coinsurance, or self-pay charges for the upcoming episode of care.

Primary and secondary payer describe the order in which health plans are billed for a patient's services. The primary payer pays first up to its allowed amount, and any remaining eligible balance is then billed to the secondary payer according to its rules.

Prior authorization is a payer requirement to obtain approval before delivering specific services, confirming that planned care is medically necessary and covered under the member's benefit. Prior authorization is typically required for higher-cost, high-utilization, or ongoing treatment and is a common denial trigger when missing or expired.

Prompt pay laws are state and federal rules that require health plans to pay, deny, or pend clean claims within a defined number of days, often with interest penalties for late payment. Prompt pay laws usually apply to fully insured commercial plans and public programs, and they define what counts as a clean claim and when the payment clock starts.

Provider enrollment is the process of registering a clinician or facility with a health plan or program so the payer recognizes the NPI, tax ID, specialty, and locations and can legally adjudicate and pay claims. Enrollment is separate from credentialing and results in participation status and effective dates for billing.

Provider taxonomy code is a standard 10 character code that classifies a provider's type, classification, and specialty for billing. The code ties a provider's NPI to a specific role, which payers use to route, price, and validate claims.

Reconsideration is a payer review process where a provider asks the plan to re-review a claim determination without starting a full formal appeal. Reconsideration is usually used to correct errors, submit missing information, or contest a denial or underpayment within specific time limits set by the payer.

Recoupment, often called a takeback, is a payer process that recovers a prior overpayment by reducing or reversing current or future claim payments instead of sending a separate bill. Recoupment directly changes cash flow and accounts receivable because prior-period payments are pulled back on new remittances.

Recredentialing is the periodic process payers and networks use to re-verify that a provider still meets their participation standards and can stay in-network. It typically includes updated licenses, malpractice coverage, sanctions checks, and CAQH attestation, and must be completed by a set deadline to avoid claim and network disruptions.

Referral vs prior authorization distinguishes two separate payer requirements: a referral is a primary-care or referring provider directing a patient to a specialist or facility, while prior authorization is payer approval for a specific service, level of care, or time period before treatment. Confusing or mixing these processes leads directly to preventable denials and write-offs.

Reimbursement rate is the percentage of billed charges that a payer actually pays over a period, usually measured by payer, service line, or program. The metric shows how contracted terms, denials, and underpayments translate into real dollars collected per dollar billed.

Remittance advice is the payer's official notice explaining how a claim was paid, adjusted, or denied, usually sent electronically in the HIPAA 835 format. An ERA lists allowed amounts, patient responsibility, payer write‑offs, and denial or adjustment codes for each claim and service line.

A Remittance Advice Remark Code is a standardized short code on an 835 remittance or paper EOB that explains why a payer paid, reduced, or denied a line item or claim. RARCs add narrative detail to Claim Adjustment Reason Codes and are critical for understanding payer decisions and fixing or appealing underpayments.

Rendering vs billing provider describes the separation between the individual clinician who actually delivers a service and the person or entity that submits the claim and receives payment. Correctly identifying both on each claim drives network eligibility, authorization matching, and audit exposure.

Residential Treatment (RTC) is a 24-hour behavioral-health level of care where patients live on site and receive structured clinical services but do not require acute inpatient hospital care. In revenue cycle terms, residential treatment usually bills on a per-diem basis and sits between inpatient hospitalization and partial hospitalization or intensive outpatient care.

Retroactive authorization is a payer approval for services that were already provided without required prior authorization or notification. It is usually granted as a one-time exception so the claim can be paid instead of denied for missing auth.

Retrospective review is a payer or utilization management review of clinical records and billing after services have already been provided, to determine coverage, medical necessity, and payment. Retrospective review can result in new denials, partial payment, or recoupments, even on claims that were initially paid.

Revenue Code is a 3 or 4 digit code on institutional claims that identifies the type of accommodation, department, or service line that provided care. Revenue Code groups charges on UB-04 and 837I claims and drives how facility services are priced and paid.

Revenue Cycle Management (RCM) is the end to end process that turns clinical services into cash, from scheduling and eligibility through coding, billing, collections, and final payment or write off. RCM ties together people, workflows, technology, and payer rules so that care provided is accurately paid, on time, and defensible in an audit.

Revenue integrity is an ongoing set of processes that ensure clinical services are documented, coded, charged, and billed correctly so the organization is paid fully and compliantly for the care it delivers. Revenue integrity connects clinical operations, coding, billing, and compliance into one continuous quality-control loop.

Room and Board in residential behavioral health is the non-clinical portion of care that covers lodging, meals, and basic facility services, usually rolled into a per-diem rate. Room and Board is typically billed on the UB-04 with specific revenue codes and is often subject to different coverage rules than therapy or medical services.

Self-pay describes a billing situation where the patient is responsible for paying charges directly instead of a health plan. Self-pay commonly includes uninsured patients, non-covered services, and amounts left after payer adjudication when no further insurance billing is possible.

Service authorization is a payer's approval for a specific service, level of care, date range, and number of units before or during treatment. Service authorization sets the limits the payer will honor when it adjudicates claims.

Single Case Agreement is a one-off contract between a payer and a provider that sets specific coverage and payment terms for a particular member and episode of care, often when the provider is out of network. Single Case Agreements define dates, services, and reimbursement rates that override the payer's standard out-of-network rules for that case.

Sliding scale fee is an income-based discount policy that reduces a patient's charge or self-pay balance according to documented financial need. Sliding fee schedules are set in advance, applied consistently, and documented as financial assistance rather than contractual write-offs.

A state behavioral health or substance abuse agency is the state government authority that oversees mental health and substance use services, funding, and policy, often called the Single State Agency (SSA). The agency may pay for care directly, control block-grant funding, manage carve-outs, or set rules that Medicaid managed care plans and providers must follow.

Step-down denial is a payer action that reduces the billed level of care or intensity of service to a lower level of care, paying at the lower rate and treating the difference as nonpayable. Step-down denial usually appears as a partial payment tied to medical necessity or concurrent review, not a full claim rejection.

A superbill is a detailed, coded statement of services that a provider gives to a patient so the patient can submit an out-of-network claim to insurance. A superbill mirrors the key data from a CMS-1500 claim, including diagnoses, CPT codes, fees, and provider identifiers.

Telehealth modifiers 95 and 93 are CPT/HCPCS modifiers that indicate whether a billable service was delivered via real-time audio-video (95) or audio-only (93) telecommunication. Payers use these modifiers, along with place of service rules, to decide if behavioral health telehealth claims are covered and how they are paid.

Telehealth parity is a set of state and payer policies that require health plans to cover or reimburse telehealth services on terms comparable to in‑person services. Telehealth parity rules define whether telehealth visits must be covered at all, at the same benefit level, and sometimes at the same rate as face‑to‑face care.

A third-party administrator (TPA) is a separate company that an employer, plan sponsor, or payer hires to manage health plan operations such as eligibility, claims processing, and customer service. A TPA may handle behavioral health benefits even when the financial risk sits with a different entity.

A timely filing appeal is a formal request asking a payer to overturn a denial that cites the claim was not submitted within the payer's filing deadline. The appeal argues that the claim was in fact timely or that an exception to the filing limit should apply, and must include documentation that proves this.

Timely filing limit is the maximum time a payer allows between the date of service (or discharge) and receipt of an initial claim. Payers can legally deny claims submitted after this deadline, even if the service was covered and medically necessary.

Treatment plan billing requirements are the payer and regulatory rules that define what must appear in a patient's plan of care for behavioral health services to be considered medically necessary and payable. Treatment plans tie diagnosis, goals, interventions, and frequency to the billed codes and dates of service that show up on claims.

UB-04 Claim Form (CMS-1450) is the standard institutional claim form that hospitals and facilities use to bill payers for services, including behavioral-health programs like residential, PHP, and IOP. The paper UB-04 mirrors the electronic 837I claim and captures facility, revenue code, per-diem, and stay-level details that are not on a CMS-1500.

Underpayment is the difference between what a payer actually reimburses and what the contract or fee schedule says should have been paid, when the payer pays less than expected. Underpayment is usually tracked as both a dollar amount and a percentage of expected reimbursement.

Utilization management is the payer process that controls if, when, and how much care is approved as medically necessary and covered. Utilization management drives prior authorization, concurrent review, and continued-stay decisions that can override clean billing data.

Utilization review (UR) is the clinical and administrative process payers and providers use to decide whether services are medically necessary, at the right level of care, and for how long. Utilization review drives prior authorizations, concurrent reviews, day limits, and many medical-necessity denials.

Value-based care is a set of payment models that tie reimbursement to quality and cost outcomes instead of only paying per unit of service. Payers pay more for meeting defined clinical and cost targets, and may pay less or recoup funds when performance falls short.

Withdrawal management (detox) is the medically supervised or clinically managed process of helping a patient safely stop using alcohol or other drugs and manage withdrawal symptoms. In behavioral health billing, withdrawal management is a distinct level of care with its own coverage rules, authorizations, and coding patterns that often differ from standard residential or inpatient treatment.

Write-off is the accounting step that removes part or all of a balance from accounts receivable because it is not expected to be collected from a payer or patient. Write-offs can be contractual, based on payer fee schedules, or non-contractual, caused by denials, policy decisions, or bad debt.