Yes - it is auditing patient charts while they are either still in the hospital or have gone home.
The purpose is to gather data mainly for The Joint Commission or The Center for Medicare and Medicaid Services (CMS). They want to see that hospitals are providing the "right" care to patients based on a particular disease or medical problem, such as those with heart attacks, those who smoke or those that come in for a surgery - in order to improve their outcomes. They have measure sets, such as "AMI - Heart Attack" and the indicators are the specific actions the clinician needs to complete, such as "Did the patient receive an aspirin within 24 hours of arrival to the hospital". If they did, they pass the measure, if not, it is considered a failure/variance and the hospital gets dinged by either TJC or CMS for it.
Collecting core measures (both inpatient and outpatient) are required federal programs, and with CMS, some indicators have financial impact for the hospital on how well they do on core measures. Also, the hospital data collected is publicly reported, so patients can look at how well a hospital is doing on core measures, to make an informed decision if they want to seek care at that hospital. Clinical core measures are one of the indicators of quality care in a facility.
Core measure abstraction is interesting and very detailed work. It is a great way to support quality care in a healthcare organization.