Resources
The behavioral health operations and billing glossary.
Plain-English definitions of the terms that decide whether a program gets paid and passes an audit — levels of care, claims and remittances, utilization review, documentation, privacy, and prescribing.
Sourced where it matters. Regulatory and standards definitions link to the primary source.
Glossary
38 terms, grouped by where they come up.
Every term has its own link: copy the address from the term to point someone at a single definition.
Levels of care
- ASAM Criteria
- The ASAM Criteria is the American Society of Addiction Medicine's set of standards for placement, continued service, and transfer of patients with addiction and co-occurring conditions. Clinicians use its multidimensional assessment to recommend a level of care, and many payers and states reference it when judging medical necessity. The fourth edition was published in 2023.
- ASAM levels of care
- ASAM levels of care are the points on the ASAM Criteria continuum, running broadly from outpatient services (Level 1) through intensive outpatient and partial-hospitalization-intensity services (Level 2) and residential care (Level 3) to medically managed inpatient care (Level 4). Decimal sub-levels distinguish intensity within each level. The fourth edition (2023) revised the sub-levels, so confirm which edition a payer or state contract uses before matching level numbers.
- Residential treatment
- Residential treatment is a level of care in which patients live at the program and receive structured treatment and support around the clock, ranging from clinically managed to medically monitored settings (ASAM Level 3). It sits between outpatient programs and hospital inpatient care and is usually billed per day.
- Withdrawal management (detox)
- Withdrawal management, commonly called detox, is the care that helps a patient withdraw safely from alcohol or other drugs. Medically monitored programs provide 24-hour nursing care with physician oversight, while medically managed programs provide hospital-level care with daily physician involvement. Federal opioid treatment regulations treat "withdrawal management" as synonymous with "detoxification."
- Partial hospitalization programPHP
- A partial hospitalization program (PHP) is a structured, intensive, non-residential program in which patients attend treatment for much of the day on most days of the week and go home at night. Medicare defines partial hospitalization services as an organized intensive ambulatory treatment program that offers less than 24-hour daily care.
- Intensive outpatient programIOP
- An intensive outpatient program (IOP) is a structured outpatient program that provides several hours of treatment a day on multiple days a week while patients live at home and keep up with work or school. It is less intensive than PHP, and Medicare has defined intensive outpatient services as a distinct benefit since 2024.
- Sober living (recovery residence)
- A recovery residence, often called sober living, is a substance-free home that offers peer support and structure to people in recovery, usually alongside outpatient treatment rather than in place of it. Standards and certification vary by state, and many residences are not licensed as treatment providers.
- Certified Community Behavioral Health ClinicCCBHC
- A Certified Community Behavioral Health Clinic (CCBHC) is a clinic that meets federal criteria to provide a comprehensive set of mental health and substance use services, including 24/7 crisis services, to anyone who requests care regardless of ability to pay. CCBHCs are funded through the Medicaid CCBHC demonstration, where states pay them a prospective payment system rate, or through SAMHSA grants.
Billing and revenue cycle
- Per diem billing
- Per diem billing is a payment arrangement in which a payer reimburses one daily rate for each day at a given level of care, such as a residential or PHP day, rather than paying for each service separately. Each day still has to be authorized and supported by that day’s documentation.
- Case rate
- A case rate is a single fixed payment for an entire episode of care, such as a full residential stay, regardless of how many days or services it includes. It shifts the financial risk of a longer or more intensive episode from the payer to the provider.
- UB-04 (CMS-1450)
- The UB-04, also called the CMS-1450, is the standard claim form institutional providers such as hospitals and residential or detox facilities use to bill, typically with revenue codes. Its data content is maintained by the National Uniform Billing Committee (NUBC), and its electronic counterpart is the 837I.
- CMS-1500
- The CMS-1500 is the standard claim form professional providers and suppliers use to bill for services, typically with CPT or HCPCS codes; individual therapy and physician services are usually billed on it. Its electronic counterpart is the 837P.
- 837 claim transaction837
- The 837 is the HIPAA standard electronic transaction, built on the ASC X12 standard, that providers use to submit health care claims to payers. It comes in professional (837P), institutional (837I), and dental (837D) versions, which correspond to the CMS-1500, the UB-04, and the dental claim form.
- Electronic remittance advice835 / ERA
- The 835, or electronic remittance advice (ERA), is the HIPAA standard electronic transaction, built on the ASC X12 standard, that a payer sends to explain how it adjudicated claims: what it paid, what it adjusted, and why. Adjustments are explained with CARC and RARC codes.
- Claim adjustment reason codeCARC
- A claim adjustment reason code (CARC) is a standard code on a remittance that explains why a claim or service line was paid differently than it was billed, such as a contractual adjustment, a coverage limit, or missing information.
- Remittance advice remark codeRARC
- A remittance advice remark code (RARC) is a standard code that adds detail to an adjustment already described by a CARC, or that conveys other information about how a claim was processed.
- Clearinghouse
- A clearinghouse is a company that sits between providers and payers, checking claims for errors, converting data into the standard formats payers accept, and routing claims and remittances in both directions. HIPAA treats health care clearinghouses as covered entities in their own right.
- Claim scrubbing
- Claim scrubbing is the automated review of a claim before it is submitted to catch errors that would cause a rejection or denial, such as invalid code and modifier pairs, mismatched patient or provider data, or a service outside its authorization.
- Denial
- A denial is a payer’s decision not to pay a claim or service line after processing it, communicated on the remittance with reason codes. Unlike a rejection, which stops a claim before it is accepted for processing, a denial usually has to be corrected and resubmitted or appealed within the payer’s deadline.
- Underpayment
- An underpayment is a claim a payer paid, but for less than the contracted or allowed amount. Because the claim shows as paid, underpayments are easy to miss unless each payment is compared with the contract rate.
- Verification of benefitsVOB
- Verification of benefits (VOB) is the check, before or at admission, of what a patient’s plan covers for a specific service: whether coverage is active, what the deductible, copay, and out-of-pocket amounts are, and whether prior authorization is required. It is often started with the X12 270/271 eligibility transaction and confirmed with the payer by phone.
- Prior authorization is a payer’s approval, obtained before a service is delivered, that the service is covered and medically necessary. For higher levels of care the approval usually covers a set number of days or units, after which concurrent review is needed to continue.
Utilization management
- Utilization reviewUR
- Utilization review (UR) is the process payers use to decide whether services are medically necessary, delivered at the appropriate level of care, and consistent with the plan’s criteria. It can happen before care (prior authorization), during care (concurrent review), or after care (retrospective review).
- Concurrent review
- Concurrent review is utilization review performed while a patient is still in treatment, in which the provider presents current clinical information to the payer to justify more authorized days or units. Days delivered past the last authorized date without an approved review are at risk of going unpaid.
- Medical necessity
- Medical necessity is the standard that a service is reasonable and needed to diagnose or treat a patient’s condition, consistent with accepted standards of care, and delivered at an appropriate level of care. For substance use treatment, payers commonly assess it against the ASAM Criteria or their own criteria, and the clinical record has to support it.
Clinical documentation
- Treatment plan
- A treatment plan is the individualized written plan of care that lists a patient’s problems, measurable goals and objectives, and the interventions that will address them. It is developed with the patient and updated at intervals set by regulation, accreditation, or payer policy, and it ties the services billed back to the patient’s needs.
- Progress note
- A progress note is the clinical record of a single service or encounter: what was done, how the patient responded, and how the patient is progressing toward treatment plan goals. Payers and auditors rely on progress notes to confirm that a billed service happened and was medically necessary.
- Group note
- A group note is the documentation of a patient’s participation in a group therapy session. The topic and attendance are shared, but each participant needs an individualized note describing their own participation and response.
- Cloned notes
- Cloned notes are clinical notes copied forward or duplicated across visits or patients with little or no change, so they no longer describe the specific encounter. Auditors treat cloned documentation as a compliance risk because it may not support the medical necessity of each billed service.
Compliance and privacy
- 42 CFR Part 2
- 42 CFR Part 2 is the federal regulation that protects the confidentiality of substance use disorder patient records maintained by federally assisted treatment programs. It prohibits use and disclosure of those records unless the patient consents or a specific exception applies, and a 2024 final rule aligned several of its provisions more closely with HIPAA.
- HIPAA
- HIPAA, the Health Insurance Portability and Accountability Act of 1996, is the federal law whose Privacy, Security, and Breach Notification Rules govern how covered entities (health plans, clearinghouses, and providers that conduct standard electronic transactions) and their business associates protect protected health information (PHI). Its administrative simplification rules also set the standard electronic transactions, such as the 837 and 835.
- Business associate agreementBAA
- A business associate agreement (BAA) is the contract HIPAA requires between a covered entity and a business associate, a vendor that creates, receives, maintains, or transmits PHI on the covered entity’s behalf, such as an EHR or billing company. It limits how the vendor may use PHI and obliges it to safeguard the data and report breaches.
- UPIC and RAC audits
- A UPIC or RAC audit is a review of paid claims by a CMS contractor. Recovery Audit Contractors (RACs) identify and correct improper Medicare payments, both overpayments and underpayments, while Unified Program Integrity Contractors (UPICs) investigate potential fraud, waste, and abuse in Medicare and Medicaid. Both usually begin with a request for medical records due by a deadline.
- Credentialing
- Credentialing is the process of verifying a clinician’s qualifications, such as licensure, education, certifications, DEA registration, and malpractice history, typically paired with enrolling the clinician with payers so their services can be billed. Organizations track expiration dates and re-credential on a set cycle.
Prescribing and medication treatment
- Medication for opioid use disorderMOUD / MAT
- Medication for opioid use disorder (MOUD) is treatment of opioid use disorder with FDA-approved medications: buprenorphine, methadone, and naltrexone. Medication-assisted treatment (MAT) is the older, broader term, which also covers medications for alcohol use disorder and is usually paired with counseling.
- Opioid treatment programOTP
- An opioid treatment program (OTP) is a program certified by SAMHSA and registered with the DEA to treat opioid use disorder with MOUD, and it is the setting through which methadone is provided for ongoing outpatient treatment of opioid use disorder. OTPs are regulated under 42 CFR Part 8.
- Electronic prescribing of controlled substancesEPCS
- Electronic prescribing of controlled substances (EPCS) is the electronic issuing and transmission of prescriptions for Schedule II through V controlled substances under DEA rules at 21 CFR Part 1311. Those rules require the prescribing application to meet specific security requirements, including two-factor authentication when the prescriber signs.
- Prescription drug monitoring programPDMP
- A prescription drug monitoring program (PDMP) is a state-run electronic database that tracks the dispensing of controlled substance prescriptions. Prescribers and pharmacists check it to see a patient’s controlled-substance history, and many states require a check before prescribing certain drugs.
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