APCs or ambulatory payment classifications are one method of paying for facility outpatient services for the Medicare program and other programs, as well. The Centers for Medicare and Medicaid Services (CMS) is responsible for maintaining 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. APCs are essentially line-level fee schedules by CPT or HCPCS procedure code.
APCs are an outpatient prospective payment system applicable only to hospitals. Physicians are reimbursed using other methodologies for payment in the United States, such as Current Procedural Terminology or CPTs. APC payments are made to hospitals when the 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. If the patient is admitted from a hospital clinic or Emergency Department, then there is no APC payment, and the hospital is paid under inpatient diagnosis-related group DRG methodology.
Payments made under the OPPS are based on the ambulatory payment classification system, which divides all outpatient services included in the payment schedule into groups. These groups categorize outpatient visits according to the clinical characteristics, the typical resource use, and the costs associated with the diagnoses, and the procedures performed.
The APC system is designed to define and explain the amount and type of resources used during a single outpatient visit. The ambulatory payment classifications are divided into surgical, medical, and ancillary-only groups, with a total of 347 classifications defined. Therapies (physical, speech, and occupational), laboratory services, ambulance, screening mammography, durable medical equipment, partial hospitalization, and end-stage renal disease dialysis are to be paid on a fee schedule.
In arriving at a final payment amount for each visit, the APC system packages or "bundles" certain predefined services performed during the same visit. These services include those that do not require significant added time and resources or that are routinely performed with certain diagnoses and/or procedures, such as X-raying and casting a fracture.
Once the APCs are assigned for a single visit, each receives a relative weight based on national averages and the relative value of the effort needed and the resources used for that APC. All of the weights for the visit are added and multiplied by a base rate to convert the relative weights to a dollar value for reimbursement. Supplies or services that have been packaged as part of the patient visit - anesthesia, observation, drugs (excluding chemotherapy), and medical/surgical supplies - have no separate payments applied to them. A discount, estimated at about 50 percent, is applied to certain significant procedures on the second and subsequent occurrences. The total payment for a claim includes fee-schedule services in addition to APC payment.
The ASC conversion factor (relative weight) is annually adjusted for budget neutrality by removing the effects of changes in wage index values for the upcoming year as compared to values for the current year.
APC in the Code Maintenance function of Rules Management allows you to maintain the information about the APC codes,including the .relative weight factor in effect for a code during a particular date range.
How to Add or Edit an APC Code
How to Delete an APC Code Detail Span
How to Void an APC Code Detail Span
What Is DRG (Diagnosis Related Group)?
Version as of 5/16/14.
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