Dental billing and RCM terms, in plain English

A

Accounts receivable (AR)

Money owed to the practice by insurers and patients for services already provided.

Adjudication

The payer’s process of reviewing a claim and deciding what to pay.

Allowed amount

The maximum the plan recognizes for a service; for in-network providers it is the contracted fee.

Alternate benefit (downgrade)

A plan provision that pays based on a less expensive procedure than the one performed.

Annual maximum

The most a dental plan will pay for a member in a benefit year.

Appeal

A formal request asking a payer to reconsider a denied or underpaid claim.

Assignment of benefits

The patient’s authorization for the insurer to pay the provider directly.

B

Benefit year

The 12-month period for maximums and deductibles — calendar year or plan year.

Birthday rule

A common coordination-of-benefits rule: for a dependent child covered by both parents, the plan of the parent whose birthday (month/day) falls first in the year is primary.

C

CAQH ProView

An online provider data repository many payers use for credentialing; profiles must be re-attested every 120 days.

CARC

Claim Adjustment Reason Code — the standard code on a remittance explaining why a payment differs from the billed amount.

CDT

Current Dental Terminology — the HIPAA standard code set for dental procedures, maintained by the ADA.

Clean claim

A claim with all information needed to be processed without additional requests.

Clearinghouse

A company that edits and transmits electronic claims between providers and payers.

CMS-1500 / 837P

The paper and electronic professional medical claim formats used for medical billing.

Coinsurance

The patient’s percentage share of the allowed amount after the deductible.

Contractual adjustment

The write-off between the practice’s fee and the in-network allowed amount.

Coordination of benefits (COB)

Rules that decide which plan pays first when a patient has more than one.

Copay

A fixed dollar amount the patient pays for a service, common in DHMO plans.

CPT

Current Procedural Terminology — the AMA code set used on medical claims.

Credentialing

Verification of a provider’s qualifications by a payer before network participation.

D

Days in AR

The average number of days it takes to collect payment.

Deductible

The amount the patient pays each benefit year before the plan shares costs.

Denial

A payer’s decision not to pay a claim or line item.

DHMO

Dental health maintenance organization — a capitation-based plan with assigned dentists and copays.

DMEPOS

Durable medical equipment, prosthetics, orthotics and supplies; dentists supplying E0486 appliances to Medicare patients must enroll as DMEPOS suppliers.

Dual coverage

A patient covered by two dental plans, or by dental and medical plans for the same service.

E

EFT

Electronic funds transfer of claim payments.

Eligibility

Confirmation that a patient is covered on the date of service.

EOB

Explanation of benefits — the payer’s statement of how a claim was processed.

ERA / 835

Electronic remittance advice — the electronic version of the EOB (X12 835).

F

Fee schedule

The list of fees a practice charges or a payer allows for each code.

Frequency limitation

How often a plan will pay for a service (for example, two exams per benefit year).

G

Good faith estimate

A cost estimate that the No Surprises Act requires providers to give uninsured or self-pay patients for scheduled care.

GY modifier

On Medicare claims, indicates the service is statutorily excluded or not covered, allowing billing to a secondary payer.

H

HCPCS Level II

National codes for supplies, equipment and services not in CPT — includes E0486 and the D-codes.

I

ICD-10-CM

The diagnosis code set used on US claims.

In-network / out-of-network

Whether the provider has a contract with the plan.

K

KX modifier

On Medicare claims, indicates documentation supports coverage criteria (for example, dental services linked to a covered medical service, or E0486 meeting the LCD).

L

LCD

Local Coverage Determination — a Medicare contractor policy defining when an item or service is covered (e.g., L33611 for oral appliances).

Least expensive alternative treatment (LEAT)

Another name for alternate-benefit provisions.

M

Medical necessity

Documentation that a service is required to diagnose or treat a condition, per payer criteria.

Missing tooth clause

A provision that excludes replacing teeth that were missing before coverage began.

N

Net collection rate

Payments collected divided by collectible charges after contractual adjustments.

Non-duplication of benefits

A COB provision under which the secondary plan pays only up to what it would have paid as primary, minus the primary payment.

NPI

National Provider Identifier — Type 1 for individual providers, Type 2 for organizations.

P

Payer

The insurance company or program that pays the claim.

Payment posting

Recording payments and adjustments to patient accounts.

PPO

Preferred provider organization — a plan with contracted fees and out-of-network benefits.

Pre-authorization

Required payer approval before certain treatment.

Pre-treatment estimate (predetermination)

A non-binding payer estimate of benefits for planned treatment.

Prior authorization (medical)

Payer approval before a medical service; under CMS-0057-F, impacted medical payers must decide standard requests within 7 calendar days and expedited within 72 hours from 2026.

R

RARC

Remittance Advice Remark Code — additional explanation on a remittance.

Recredentialing

Periodic re-verification of a provider by a payer, often every three years.

Rejection

A claim returned by the clearinghouse or payer before adjudication because of format or data errors.

Remittance

The payment and explanation sent by a payer.

S

Secondary claim

A claim sent to the second plan after the primary has paid.

Superbill

An itemized list of services and codes given to a patient to file with insurance.

T

Timely filing limit

The deadline for submitting a claim after the date of service, set by each payer.

U

UCR

Usual, customary and reasonable — a fee benchmark some plans use for out-of-network benefits.

Underpayment

A payment below the contracted or expected amount.

W

Waiting period

Time after enrollment before certain services are covered.

Write-off

An amount removed from the balance — contractual, administrative or bad debt.

X

X12 270/271

The electronic eligibility inquiry and response transactions.

X12 276/277

The electronic claim status inquiry and response transactions.

X12 837D

The electronic dental claim transaction.