What is Medicare APC?

APC stands for Medicare's ambulatory payment classification. Hospitals use Medicare APC codes to bill the federal government for hospital services given to Medicare and Medicaid patients. Every item, machine or procedure used to care for a Medicare or Medicaid patient has a specialized code that is submitted by the hospital during the billing process.

History

• Medical billing codes have been around since 1965, when President Lyndon B. Johnson signed the Medicare/Medicaid program into law. The federal government devised the Medicare Outpatient Prospective Payment System (OPPS) in 2000, which established the APC system to regulate the amount of reimbursement given to hospitals for their services. The program's greatest legislative change came in 2003, when President George W. Bush signed the Medicare Modernization Act (MMA).

Usage

• Only billing for Medicare and Medicaid uses the APC system. Other insurance providers use the system called current procedural terminology (CPT) codes devised by the American Medical Association in 1966. Like their government counterpart, CPT codes communicate to the patient's insurance company what medical, surgical and diagnostic services were performed by medical personnel.

Hospital Stays

• APC codes are used at all levels of care, whether the procedure is outpatient or in the hospital. When a patient stays at a hospital, anything used during a procedure or in the room is a billable expense. The government-sponsored Medicare or Medicaid program is charged for the patient's "room and board" for the extent of the care period.

APC Code Billing

• Medical coding specialists determine what APC codes will be used in the billing process. The codes selected depend on the procedures done, the size of the facility and the complexity of the service. The coding specialist sends the claim in once it has been coded satisfactorily.

Procedures

• Medical monitoring device

  Hospitals bill for anything performed by the medical staff, such as lab tests, diagnostic tests, durable medical equipment, hospice, pharmacy, surgery, ambulance service, anesthesiology and IV administration. They will also bill Medicare if a patient is transferred within the facility, such as from the intensive care unit or emergency room to a regular room.

Implementation

• Hospitals have to use APC codes when they submit a claim to Medicare, but the amount of reimbursement they receive is not fixed on a nationwide scale. Each state regulates the amount of reimbursement.

  The U.S. Department of Health and Human Services governs the Medicare APC program through the Centers for Medicare and Medicaid Services (CMS).