Reference
Medical practice vendor glossary
Quick answer
Plain-English definitions of the vendor terms independent medical practices meet in RFPs, contracts, and demos — RCM, first-pass acceptance, delegated credentialing, PPPM, KLAS score, ambient scribe, MSO — each linked to the pillar guide and evaluation rubric that governs how the term is applied on this site.
Plain-English definitions of the vocabulary independent practices see when evaluating billing, credentialing, EHR, AI scribe, and consulting vendors. Every term links back to the relevant buyer guide, criteria rubric, or decision tool so the same definition is applied consistently across the site.
Medical Billing & RCM
Topic hub →Revenue Cycle Management (RCM)(also: RCM, revenue cycle)
- Revenue cycle management covers the full arc from patient scheduling and eligibility verification through coding, claim submission, payment posting, denials work, and final patient collection. Medical billing is a narrower subset focused on claim submission and payment posting. When comparing vendors, always confirm which segments of the cycle are inside the scope of work — 'RCM' as a label is not a specification.
First-Pass Claim Acceptance Rate
- First-pass claim acceptance rate measures the share of submitted claims that clear payer edits without rework on first submission. For most specialties, 95% or higher is the mark of a competent billing operation. Below 90% signals rushed submission, weak claim scrubbing, or credentialing gaps that are producing avoidable denials.
Days in Accounts Receivable (Days in AR)
- Days in AR is calculated as total accounts receivable divided by average daily charges. It is the single best summary metric for how quickly a billing operation is converting services into cash. For most specialties, days in AR trending under 35 is healthy; consistently above 45 signals a denials, follow-up, or credentialing problem worth investigating.
Percentage-of-Collections Pricing
- Under percentage-of-collections pricing, the billing vendor takes a defined percentage of what they actually collect for the practice, aligning incentives on collections but often penalizing high-reimbursement specialties. Always confirm which claims are excluded (self-pay, patient balances, small balances, appeals) before comparing headline rates.
Clearinghouse
- A clearinghouse translates and validates electronic claims between the practice management system and hundreds of individual payers. Ownership of the clearinghouse account is a contractual issue — the practice, not the billing vendor, should own it so that switching vendors does not require rebuilding payer connections from scratch.
Cost of Collection
- Cost of collection is the fully loaded cost of running billing — salaries, benefits, software, clearinghouse fees, allocated overhead — divided by net collections. Most independent practices land between 6% and 12%. Calculating this before shopping vendors is the only way to fairly compare an outsourced percentage-of-collections quote.
Credentialing & Payer Enrollment
Topic hub →CAQH ProView(also: CAQH)
- CAQH ProView is a single provider-maintained credentialing profile that most commercial payers pull from during initial credentialing and re-credentialing. The provider (or their credentialing service, working inside the provider's account) must re-attest every 120 days or payers may silently pull the profile and disrupt claims.
PECOS
- PECOS is the CMS system through which providers enroll in Medicare, add practice locations, and complete revalidation. Enrollment credentials should stay with the practice, not the billing or credentialing vendor. Medicare enrollment via PECOS typically takes 45–90 days.
Payer Enrollment
- Payer enrollment is the process of contracting with a specific payer so the provider is in-network and can be reimbursed under that payer's fee schedule. It is distinct from credentialing, which verifies identity, licensure, education, and history. A good credentialing vendor is explicit about which they do, which they hand off, and which payers are closed panels in your area.
Closed Panel
- A closed panel means the payer has determined they have sufficient network capacity in that specialty and geography and is not accepting new provider applications. No vendor can conjure enrollment into a closed panel — any credentialing service that promises to is misrepresenting. Check panel status before spending on an application.
EHR & Practice Software
Topic hub →EHR (Electronic Health Record)(also: EMR, electronic medical record)
- An electronic health record (EHR, sometimes called an EMR) is the system of record for clinical documentation, orders, results, and patient chart data. Most ambulatory vendors bundle EHR with a practice management (PM) module for scheduling, eligibility, and billing. Selection weighs specialty fit, usability, interoperability, and 3-year total cost of ownership more than headline monthly rate.
ONC Certified Health IT
- ONC certification signals that an EHR product meets federal criteria for interoperability, security, and quality reporting. Certification is verifiable on the CHPL registry. For practices participating in Medicare quality programs, ONC-certified EHR is typically required — confirm the specific certification edition matches the program you participate in.
SOC 2 Type II
- SOC 2 Type II is an independent audit report covering security, availability, and confidentiality controls tested over a defined period (typically 6–12 months). It is a common baseline expectation for vendors handling PHI alongside a signed BAA. Ask for the current report under NDA — a public marketing badge is not the same as the report.
Ambient AI Scribes
Topic hub →Ambient AI Scribe
- An ambient AI scribe captures the audio of a clinical encounter, transcribes it, and drafts a structured note (typically SOAP or specialty template) for clinician review and sign-off. Evaluation weighs specialty accuracy, EHR integration depth, patient-consent workflow, and transparency of the underlying model — see the AI scribe rubric for the full criteria set.
Business Associate Agreement (BAA)
- A Business Associate Agreement is required under HIPAA any time a vendor creates, receives, maintains, or transmits protected health information on behalf of a covered entity. Every billing vendor, credentialing service, EHR vendor, AI scribe, and cloud provider touching PHI must sign one. No BAA is a hard walk-away.
Practice Consulting & MSOs
Topic hub →Management Services Organization (MSO)
- A management services organization provides administrative infrastructure — billing, HR, IT, payer contracting, sometimes real estate — to independent practices. Structures range from pure fee-for-service to friendly-PC arrangements involving equity. Stark Law and anti-kickback compliance, exit terms, and clinical autonomy are the primary evaluation axes.