APC (Ambulatory Payment Classification)
Encyclopedia
APCs or Ambulatory Payment Classifications are the United States government's
method of paying for facility outpatient services for the Medicare (United States)
program. A part of the Federal Balanced Budget Act of 1997 made the Centers for Medicare and Medicaid Services
create a new Medicare "Outpatient Prospective Payment System
" (OPPS) for hospital outpatient services -analogous to the Medicare prospective payment system for hospital inpatients known as Diagnosis-related group
or DRGs. This OPPS, was implemented on August 1, 2000. APCs are an outpatient prospective payment system applicable only to hospitals. Physicians are reimbursed via other methodologies for payment in the United States, such as Current Procedural Terminology
or CPTs.
APC payments are made to hospitals when the Medicare outpatient is discharged from the Emergency Department or clinic or is transferred to another hospital (or other facility) which is not affiliated with the initial hospital where the patient received outpatient services. Although APCs began through the federal system of Medicare, they have also been considered for adoption by state programs, such as Medicaid
, and other third-party private health insurers. If the patient is admitted from a hospital clinic or Emergency Department, then there is no APC payment, and Medicare will pay the hospital under inpatient Diagnosis-related group
DRG methodology.
Federal government of the United States
The federal government of the United States is the national government of the constitutional republic of fifty states that is the United States of America. The federal government comprises three distinct branches of government: a legislative, an executive and a judiciary. These branches and...
method of paying for facility outpatient services for the Medicare (United States)
Medicare (United States)
Medicare is a social insurance program administered by the United States government, providing health insurance coverage to people who are aged 65 and over; to those who are under 65 and are permanently physically disabled or who have a congenital physical disability; or to those who meet other...
program. A part of the Federal Balanced Budget Act of 1997 made the Centers for Medicare and Medicaid Services
Centers for Medicare and Medicaid Services
The Centers for Medicare & Medicaid Services , previously known as the Health Care Financing Administration , is a federal agency within the United States Department of Health and Human Services that administers the Medicare program and works in partnership with state governments to administer...
create a new Medicare "Outpatient Prospective Payment System
Prospective payment system
A prospective payment system is a means of determining insurance payments based on predetermined prices, commonly from Medicare. Payments are typically based on codes provided on the insurance claim.Examples of these codes include:...
" (OPPS) for hospital outpatient services -analogous to the Medicare prospective payment system for hospital inpatients known as Diagnosis-related group
Diagnosis-related group
Diagnosis-related group is a system to classify hospital cases into one of originally 467 groups. The 467th was "Ungroupable." The system of classification was developed as a collaborative project by Robert B Fetter, PhD of the Yale School of Management, and John D Thompson, MPH of the Yale...
or DRGs. This OPPS, was implemented on August 1, 2000. APCs are an outpatient prospective payment system applicable only to hospitals. Physicians are reimbursed via other methodologies for payment in the United States, such as Current Procedural Terminology
Current Procedural Terminology
The Current Procedural Terminology code set is maintained by the American Medical Association through the CPT Editorial Panel. The CPT code set describes medical, surgical, and diagnostic services and is designed to communicate uniform information about medical services and procedures among...
or CPTs.
APC payments are made to hospitals when the Medicare outpatient is discharged from the Emergency Department or clinic or is transferred to another hospital (or other facility) which is not affiliated with the initial hospital where the patient received outpatient services. Although APCs began through the federal system of Medicare, they have also been considered for adoption by state programs, such as Medicaid
Medicaid
Medicaid is the United States health program for certain people and families with low incomes and resources. It is a means-tested program that is jointly funded by the state and federal governments, and is managed by the states. People served by Medicaid are U.S. citizens or legal permanent...
, and other third-party private health insurers. If the patient is admitted from a hospital clinic or Emergency Department, then there is no APC payment, and Medicare will pay the hospital under inpatient Diagnosis-related group
Diagnosis-related group
Diagnosis-related group is a system to classify hospital cases into one of originally 467 groups. The 467th was "Ungroupable." The system of classification was developed as a collaborative project by Robert B Fetter, PhD of the Yale School of Management, and John D Thompson, MPH of the Yale...
DRG methodology.