APC stands for Ambulatory Payment Classification. The primary purpose is to classify what?

• A. Classify outpatient services into payment groups
• B. Classify inpatient stays
• C. Determine pharmacy payments
• D. Determine laboratory codes

Answer: (A)

Outpatient payment classification is about grouping ambulatory services into payment groups so the payer can determine reimbursement under the Medicare OPPS. Each outpatient service or procedure gets assigned to an Ambulatory Payment Classification based on the resources it typically requires. The payment for an encounter is then derived from the APC’s weight, providing a single bundled rate for that group of services. This approach is specific to outpatient care, unlike inpatient payments which use DRGs to classify stays. It also isn’t about setting pharmacy payments, which are handled separately, or about lab codes, which are billed differently.