Healthcare Claims Recovery — Glossary

CARC and RARC codes explain why a healthcare claim was denied or adjusted. Learn how denial recovery firms read them, fix them, and get paid.

Aged A/R is healthcare revenue trapped in unpaid claims sorted by time bucket, the core inventory of every recovery firm that collects on old hospital and physician receivables.

The working definition of Coordination of Benefits (COB) for healthcare recovery firms: the rules that determine which insurer pays first when a patient has multiple coverages.

Credentialing is the process by which a healthcare facility verifies a clinician's qualifications, licenses, and privileges before allowing patient contact.

DRG downcoding occurs when a payer assigns a lower-severity diagnosis-related group than the clinical record supports, reducing hospital reimbursement.

Locum tenens is temporary physician placement to cover vacancies, peak demand, or specialty gaps, with the staffing firm paid on a success-fee markup to the bill rate.

The federal independent dispute resolution process under the No Surprises Act for resolving out-of-network payment disputes between providers and payers.

Out-of-network reimbursement is the payment process for healthcare services delivered by providers without a payer contract, governed by state regulations, federal law, and the No Surprises Act.

A claim denial is a payer's refusal to pay a submitted healthcare claim, issued with specific reason codes that determine whether and how the provider can recover payment.

A clinical validation denial occurs when a payer rejects a diagnosis or procedure code because the documented clinical evidence does not support the reported severity or condition.

A credit balance in healthcare accounts receivable occurs when payments and adjustments exceed charges owed, creating refund obligations and compliance exposure for providers.

A medical necessity denial occurs when a payer refuses reimbursement because the service, setting, or frequency does not meet the payer's criteria for medically necessary care.

A Medicare Set-Aside allocates settlement funds for future injury-related medical care so Medicare does not pay for treatments already compensated.

The hard deadline by which a healthcare provider must submit a claim to a payer after the date of service, with no appeal for late submissions.

A travel nursing contract is a fixed-term staffing agreement between a healthcare facility and a nurse, typically arranged through a staffing agency that earns a success fee per placement.

Underpayment occurs when a payer reimburses a provider less than the contracted or legally required amount for a healthcare claim.