Medicare’s Coding System for Medical Billing
APC stands for Medicare’s Ambulatory Payment Classification, the coding system that hospitals use to bill the federal government for services provide to Medicare and Medicaid patients. Every procedure or medication given to Medicare and Medicaid patients has its own unique code that must be submitted to Medicare by the hospital in order to receive reimbursement for services.
The APC system was created by the U.S. government in 2000 as part of the Medicare Outpatient Prospective Payment System (OPPS) in order to regulate monies paid to hospitals for various services. Although medical billing began in 1965 with the passage of President Lyndon B. Johnson’s Medicare Medicare and Medicaid programs, it wasn’t until 2003 when President George W. Bush signed the Medicare Modernization Act (MMA) that the APC system received its most recent updates.
While physicians are reimbursed for accounts billed with Current Procedural Terminology (CPTs) devised by the American Medical Association in 1966, the APC system applies to only to hospitals. The Medicare system for payment billing is known as Diagnosis-Related Group (DRGs.)
How It Works
For a single patient visit, the hospital can receive several separate APC payments. Anything used during a procedure is a billable expense, and it is up to the hospital’s team of coding specialists to determine which APC codes are appropriate. In addition to the procedures provided by the hospital, APC codes are chosen by criteria like the size of the facility and the complexity of service. Reimbursement is not fixed on a nationwide scale, payment is regulated in every state.
What Can Be Billed?
Hospitals can bill for everything from lab and diagnostic testing, durable medical equipment, pharmacy, surgery, anesthesiology, ambulance service, and emergency and ICU care, and more. Additional information can be found on Centers for Medicare and Medicaid Services website.