APC Payment Groups

10.2 - APC Payment Groups (Rev. 1445; Issued: 02-08-08; Effective: 01-01-08; Implementation: 03-10-08) Each HCPCS code for which separate payment is made under the OPPS is assigned to an ambulatory payment classification (APC) group. The payment rate and coinsurance amount calculated for an APC apply to all of the services assigned to the APC. A hospital may receive a number of APC payments for the services furnished to a patient on a single day; however, multiple surgical procedures furnished on the same day are subject to discounting. (See section 10.5 for discussion of multiple procedure discounting under the OPPS). Services within an APC are similar clinically and with respect to hospital resource use. The law requires that the median cost for the highest cost service within the APC may not be more than 2 times the median cost for the lowest cost service in the APC, and the Secretary may make exceptions in unusual cases, such as low volume items and services. This is commonly called the “2 times rule.” The median costs of services change from year to year as a result of changes in hospitals’ charge, changes to cost-to-charge ratios as determined from hospital cost reports, and changes in the frequency of services. Therefore, the APC assignment of a service may change from one year to the next year as is needed to avoid a violation of the 2 times rule or to improve clinical and/or resource homogeneity of APCs. This APC reconfiguration may result in significant changes in the payment rate for the APC and, therefore, for the service being billed.