Ambulatory
Payment
Classifications

HCFA was mandated through the Omnibus Budget Reconciliation Act of 1986 to develop a prospective payment system (PPS) for outpatient services. Originally APG (Ambulatory Payment Groups) were developed for the facility component of ambulatory care rendered in hospital ambulatory surgery, emergency room and outpatient and ancillary department clinic settings. In 1998, HCFA modified the APG model and adopted the name "APCs" ( Ambulatory Payment Classifications ). As early as 1991, a number of third party payers adopted some form of APG based reimbursement in several states. California, Washington, Iowa, Maryland and Massachusetts payers already have mandated APGs, and the year 2000 implementation of APCs for Medicare will require all states to follow outpatient prospective payment rules.

HCFA is due to publish and implement their final rules for APCs in the first quarter of 2000, and these rules represent a significant change in how providers need to manage ambulatory patient care services. APC preparation involves a proactive assessment of the many systems and processes critical to the outpatient revenue cycle. These include:

• Charge Master Review
• Encounter Form and Charge Tool(s) Review
• Registration and Data Capture Assessment
• Clinical Documentation and Coding Review
• Ancillary Services Assessment
• Information Systems Assessment
• Financial Impact Analysis
• Resource Utilization Review
• Provider-Based Entity Evaluation
• Training and Education
• PECOS (tm) Web-based Training and Education
• APC / Ambulatory Payment Classification Grouper Software

HSMN’s "Assess, Prepare and Communicate" approach to APC preparation helps organizations define and understand their outpatient business, understand the financial implications of prospective payment, anticipate compliance exposure, improve outpatient data management under any reimbursement system, and identify outpatient resource, quality and utilization management issues.