Resources
Healthcare revenue cycle glossary
Plain-English definitions of the patient billing and revenue-cycle terms you'll encounter when resolving self-pay balances — from early-out servicing and financial assistance to HIPAA, TCPA, and Section 501(r).
- Accounts Receivable (AR)
- The outstanding balances owed to a healthcare provider for services already delivered — including both payer and patient portions. Managing AR well means resolving those balances before they age into bad debt.
- AR Aging
- A report that groups unpaid balances by how long they have been outstanding — typically 0–30, 31–60, 61–90, and 90+ days. The older the bucket, the harder the balance is to resolve.
- Bad Debt
- Patient balances a provider no longer expects to collect and writes off, after financial-assistance screening and reasonable efforts. Bad debt is earned revenue that turns into a direct loss to margin.
- Charity Care
- Free or discounted care provided to patients who qualify under a provider's financial-assistance policy based on income or hardship. Charity care is distinct from bad debt because eligibility is established, not assumed.
- Days in AR (DSO)
- The average number of days it takes a provider to collect payment after care is delivered. A lower figure means faster cash flow and healthier working capital.
- Early-Out Servicing
- Engaging patient balances during the early-out window — after billing but before an account reaches the provider's default or bad-debt threshold. Early-out servicing is performed on the provider's behalf and under its brand, and is not third-party debt collection.
- Explanation of Benefits (EOB)
- A statement from a health plan describing what it paid on a claim and what the patient owes. The EOB establishes the patient-responsibility amount that early-out servicing works to resolve.
- Financial Assistance Policy (FAP)
- A provider's written policy describing eligibility and application for free or discounted care. Section 501(r) requires nonprofit hospitals to maintain and widely publicize a FAP.
- HIPAA
- The Health Insurance Portability and Accountability Act, which governs how protected health information is used, disclosed and safeguarded. Patient account communications must be handled under HIPAA, often through a Business Associate Agreement.
- Patient Financial Engagement
- Respectful, service-oriented outreach that helps patients understand and resolve their balances — offering payment options, plans and financial-assistance pathways rather than pressure.
- Patient Responsibility
- The portion of a healthcare bill a patient owes after insurance — including deductibles, copays, coinsurance and non-covered services. It is the balance early-out servicing engages.
- Payment Plan
- A structured arrangement that lets a patient pay a balance in scheduled installments rather than all at once, increasing the likelihood of full resolution.
- Point-of-Service (POS) Collections
- Collecting estimated patient responsibility at or before the time of care. Strong POS collections reduce the balances that later flow into the early-out window.
- Pre-Default Servicing
- Working a patient balance before it reaches the provider's established default or bad-debt threshold, while the provider retains ownership and control of the account.
- Section 501(r)
- Internal Revenue Code requirements for nonprofit hospitals, including maintaining a financial-assistance policy and making reasonable efforts to determine FAP eligibility before certain extraordinary collection actions.
- Self-Pay
- Balances owed directly by the patient — either because they are uninsured or because a patient-responsibility portion remains after insurance. Self-pay balances are the core of early-out servicing.
- TCPA (Telephone Consumer Protection Act)
- A U.S. federal law that governs calls and text messages to consumers, including consent requirements and opt-out handling. It is central to compliant SMS and voice patient outreach.
- No Surprises Act
- A federal law that protects patients from certain unexpected out-of-network bills and supports good-faith cost estimates. It shapes how patient balances are communicated and billed.
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