Ambulatory Payment Classification System Flashcards

Ambulatory Payment Classification System Overview

• The primary unit of payment under the Outpatient Prospective Payment System (OPPS) is the Ambulatory Payment Classification (APC).
• The APC system categorizes outpatient services into groups linked to specific HCPCS Level I (CPT) and HCPCS Level II codes to determine reimbursement by Medicare.

Structure of the APC System

• APCs consist of several hundred groups that determine payments for various outpatient hospital services.
• Some services, such as anesthesia and minor ancillary services, are considered packaged within the APC payment and are not reimbursed separately.
• Each CPT/HCPCS Level II code is designated to one APC, and the assignment remains constant regardless of the patient's diagnosis.

Payment Status Indicators (PSI)

• Each HCPCS Level I (CPT) and Level II code, as well as APCs, is assigned a Payment Status Indicator (PSI) under the APC system.
• PSIs are essential in determining payment eligibility for services under OPPS.

Types of Payment Status Indicators

• A: Services paid under other fee schedules (e.g., ambulance services, therapy).
• B: Codes not recognized by OPPS on outpatient bills.
• C: Inpatient procedures.
• D: Discontinued codes.
• E1: Non-covered items, excluded by Medicare.
• E2: Services lacking pricing data.
• F: Corneal tissue acquisition and certain CRNA services.
• G: Pass-Through Drugs and Biologicals.
• H: Pass-Through Device Categories.
• J1/J2: Hospital Part B services regarding APC payment.
• K: Nonpass-Through Drugs, including non-implantable biologicals.
• L: Influenza and pneumococcal vaccines.
• M: Services not billable to the Medicare Administrative Contractor (MAC).
• N: Services packaged into APC rates.
• P: Partial hospitalization.
• Q1/Q2: Specific packaged codes.
• Q3: Codes potentially payable through Composite APC.
• Q4: Conditionally packaged laboratory tests.
• R: Blood and blood products.
• S: Services not discounted when multiple services performed.
• T: Procedures with multiple discounts applied.
• U: Brachytherapy sources.
• V: Clinic or emergency department visits.
• Y: Non-implantable durable medical equipment.

Conclusion

• The Ambulatory Payment Classification System is a fundamental mechanism for determining Medicare reimbursement for outpatient services, with essential roles played by APCs and PSIs. Understanding the classifications and their implications is crucial for effective billing and compliance in healthcare.