Questions and Answers
What are APCs?
Ambulatory Payment Classifications, a method of paying facilities for outpatient services under Medicare.
How do APCs work?
APCs are composed of services grouped by clinical intensity and cost, resulting in a fixed prospective payment.
Why did CMS create APCs?
To transfer financial risk from the Federal government to hospitals and achieve potential cost-savings.
What areas of hospital outpatient services are paid under the APC methodology?
Signup and view all the answers
Durable Medical Equipment is paid through APC methodology.
Signup and view all the answers
Are there hospital outpatient services which are NOT paid under APCs?
Signup and view all the answers
Study Notes
What are APCs
- Ambulatory Payment Classifications (APCs) are payment methods for outpatient services under the Medicare program.
- Established as part of the Federal Balanced Budget Act of 1997 to implement the Outpatient Prospective Payment System (OPPS).
- OPPS mimics the inpatient Medicare payment system based on Diagnosis Related Groups (DRGs).
- APCs specifically apply to hospitals and do not affect physician payments under the Medicare Physician Fee Schedule.
- Hospitals receive APC payments only for outpatient discharges or transfers, not for inpatient admissions.
How do APCs work
- Each APC groups similar services by clinical intensity, resource use, and cost.
- Payments are based on Healthcare Common Procedure Coding System (HCPCS) codes submitted by hospitals on UB 04 claim forms.
- The hospital assumes risk for profit or loss with each fixed APC payment.
- Payment is calculated by multiplying the APC's relative weight by the OPPS conversion factor, with adjustments for geography.
- Patient co-payments typically range from 20% to 40%, with a future cap set at 20%.
Why did CMS create APCs
- APCs were designed to shift financial risk for outpatient services from the Federal government to hospitals.
- The aim is to promote cost-effective, efficient, and profitable outpatient service delivery.
Areas of Hospital Outpatient Services Paid under APCs
- APC payments cover a variety of outpatient services: Outpatient Surgery, Outpatient Clinics, Emergency Department Services, and Observation Services.
- Includes payment for outpatient testing (e.g., radiology, nuclear medicine) and certain therapies (drugs, intravenous therapies, blood products).
- Revised guidelines in 2016 clarified the APC for Observation services, incorporating specific codes for extended assessments and management.
Hospital Outpatient Services NOT Paid under APCs
- Durable Medical Equipment and certain lab tests are paid using non-APC methodologies.
- Bundling of services is emphasized for 2016 and beyond, affecting many outpatient tests in the ED.
- Non-bundled tests include diagnostic radiology studies, bedside ultrasounds, and EKGs, while IV infusions and push dose medications are add-ons that also remain unbundled.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge on Ambulatory Payment Classifications (APCs) with these flashcards. APCs are crucial for understanding how Medicare pays for outpatient services. Learn the definitions and key concepts to enhance your understanding of the Medicare system.
