APCs or Ambulatory Payment Classifications are the United States government's method of paying for facility outpatient services for the Medicare (United States) program. A part of the Federal Balanced Budget Act of 1997 made the Centers for Medicare and Medicaid Services create a new Medicare "Outpatient Prospective Payment System" (OPPS) for hospital outpatient services -analogous to the Medicare prospective payment system for hospital inpatients known as Diagnosis-related group or DRGs. This OPPS, was implemented on August 1, 2000. APCs are an outpatient prospective payment system applicable only to hospitals. Physicians are reimbursed via other methodologies for payment in the United States, such as Current Procedural Terminology or CPTs.
The Federal Government of the United States is the national government of the United States, a federal republic in North America, composed of 50 states, a federal district, five major self-governing territories, and several island possessions. The federal government is composed of three distinct branches: legislative, executive, and judicial, whose powers are vested by the U.S. Constitution in the Congress, the President, and the federal courts, respectively. The powers and duties of these branches are further defined by acts of congress, including the creation of executive departments and courts inferior to the Supreme Court.
Medicare is a national health insurance program in the United States, begun in 1966 under the Social Security Administration and now administered by the Centers for Medicare and Medicaid Services (CMS). It provides health insurance for Americans aged 65 and older. It also provides health insurance to younger people with some disability status as determined by the Social Security Administration, as well as people with end stage renal disease and amyotrophic lateral sclerosis. Medicare is funded by a combination of a payroll tax, beneficiary premiums and surtaxes from beneficiaries, and general U.S. Treasury revenue.
The Centers for Medicare & Medicaid Services (CMS), previously known as the Health Care Financing Administration (HCFA), is a federal agency within the United States Department of Health and Human Services (HHS) that administers the Medicare program and works in partnership with state governments to administer Medicaid, the Children's Health Insurance Program (CHIP), and health insurance portability standards. In addition to these programs, CMS has other responsibilities, including the administrative simplification standards from the Health Insurance Portability and Accountability Act of 1996 (HIPAA), quality standards in long-term care facilities through its survey and certification process, clinical laboratory quality standards under the Clinical Laboratory Improvement Amendments, and oversight of HealthCare.gov.
APC payments are made to hospitals when the Medicare outpatient is discharged from the Emergency Department or clinic or is transferred to another hospital (or other facility) which is not affiliated with the initial hospital where the patient received outpatient services. Although APCs began through the federal system of Medicare, they have also been considered for adoption by state programs, such as Medicaid, and other third-party private health insurers. If the patient is admitted from a hospital clinic or Emergency Department, then there is no APC payment, and Medicare will pay the hospital under inpatient Diagnosis-related group DRG methodology.
Medicaid in the United States is a federal and state program that helps with medical costs for some people with limited income and resources. Medicaid also offers benefits not normally covered by Medicare, including nursing home care and personal care services. The Health Insurance Association of America describes Medicaid as "a government insurance program for persons of all ages whose income and resources are insufficient to pay for health care." Medicaid is the largest source of funding for medical and health-related services for people with low income in the United States, providing free health insurance to 74 million low-income and disabled people as of 2017. It is a means-tested program that is jointly funded by the state and federal governments and managed by the states, with each state currently having broad leeway to determine who is eligible for its implementation of the program. States are not required to participate in the program, although all have since 1982. Medicaid recipients must be U.S. citizens or qualified non-citizens, and may include low-income adults, their children, and people with certain disabilities. Poverty alone does not necessarily qualify someone for Medicaid.
Diagnosis-related group (DRG) is a system to classify hospital cases into one of originally 467 groups, with the last group being "Ungroupable". This system of classification was developed as a collaborative project by Robert B Fetter, PhD, of the Yale School of Management, and John D. Thompson, MPH, of the Yale School of Public Health. The system is also referred to as "the DRGs", and its intent was to identify the "products" that a hospital provides. One example of a "product" is an appendectomy. The system was developed in anticipation of convincing Congress to use it for reimbursement, to replace "cost based" reimbursement that had been used up to that point. DRGs are assigned by a "grouper" program based on ICD diagnoses, procedures, age, sex, discharge status, and the presence of complications or comorbidities. DRGs have been used in the US since 1982 to determine how much Medicare pays the hospital for each "product", since patients within each category are clinically similar and are expected to use the same level of hospital resources. DRGs may be further grouped into Major Diagnostic Categories (MDCs). DRGs are also standard practice for establishing reimbursements for other Medicare related reimbursements such as to home healthcare providers.
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The Emergency Medical Treatment and Active Labor Act (EMTALA) is an act of the United States Congress, passed in 1986 as part of the Consolidated Omnibus Budget Reconciliation Act (COBRA). It requires hospital Emergency Departments that accept payments from Medicare to provide an appropriate medical screening examination (MSE) to anyone seeking treatment for a medical condition, regardless of citizenship, legal status, or ability to pay. Participating hospitals may not transfer or discharge patients needing emergency treatment except with the informed consent or stabilization of the patient or when their condition requires transfer to a hospital better equipped to administer the treatment.
Mark Barr McClellan is the Director of the Robert J Margolis Center for Health Policy and the Margolis Professor of Business, Medicine and Health Policy at Duke University. Formerly, he was a senior fellow and director of the Health Care Innovation and Value Initiative at the Engelberg Center for Health Care Reform at The Brookings Institution, in Washington, D.C. McClellan served as Commissioner of the United States Food and Drug Administration under President George W. Bush from 2002 through 2004, and subsequently as administrator of the Centers for Medicare and Medicaid Services from 2004 through 2006.
Stark Law is a set of United States federal laws that prohibit physician self-referral, specifically a referral by a physician of a Medicare or Medicaid patient to an entity providing designated health services ("DHS") if the physician has a financial relationship with that entity.
Outpatient surgery, also known as ambulatory surgery, day surgery, day case surgery, or same-day surgery, is surgery that does not require an overnight hospital stay. The term “outpatient” arises from the fact that surgery patients may enter and leave the facility on the same day. The advantages of outpatient surgery over inpatient surgery include greater convenience and reduced costs.
A public hospital or government hospital is a hospital which is owned by a government and receives government funding. In some countries, this type of hospital provides medical care free of charge, the cost of which is covered by government reimbursement.
Program of All-inclusive Care for the Elderly (PACE) are programs within the United States that provide comprehensive health services for individuals age 55 and over who are sufficiently frail to be categorized as "nursing home eligible" by their state's Medicaid program. Eligibility for PACE requires that individuals be 55 years old or older, certified by the state to need nursing home-level care, reside near a PACE program, and able to live safely in the community. Services include primary and specialty medical care, nursing, social services, therapies, pharmaceuticals, day health center services, home care, health-related transportation, minor modification to the home to accommodate disabilities, and anything else the program determines is medically necessary to maximize a member's health.
The United States government provides funding to hospitals that treat indigent patients through the Disproportionate Share Hospital (DSH) programs, under which facilities are able to receive at least partial compensation.
Severity of illness (SOI) is defined as the extent of organ system derangement or physiologic decompensation for a patient. It gives a medical classification into minor, moderate, major, and extreme. The SOI class is meant to provide a basis for evaluating hospital resource use or to establish patient care guidelines.
Hospice care in the United States is a type and philosophy of end-of-life care which focuses on the palliation of a terminally ill patient's symptoms. These symptoms can be physical, emotional, spiritual or social in nature. The concept of hospice as a place to treat the incurably ill has been evolving since the 11th century. Hospice care was introduced to the United States in the 1970s in response to the work of Cicely Saunders in the United Kingdom. This part of health care has expanded as people face a variety of issues with terminal illness. In the United States, it is distinguished by extensive use of volunteers and a greater emphasis on the patient's psychological needs in coming to terms with dying.
A rural health clinic (RHC) is a clinic located in a rural, medically under-served area in the United States that has a separate reimbursement structure from the standard medical office under the Medicare and Medicaid programs. RHCs were established by the Rural Health Clinic Services Act of 1977, . The RHC program increases access to health care in rural areas by
creating special reimbursement mechanisms that allow clinicians to practice in rural, under-served areas
increasing utilization of physician assistants (PA) and nurse practitioners (NP)
A hospital-acquired condition (HAC) is an undesirable situation or condition that affects a patient and that arose during a stay in a hospital or medical facility. It is a designation used by Medicare/Medicaid in the US for determining MS-DRG reimbursement beginning with version 26. Not only hospital-acquired infections but also any other situation or condition, such as pressure ulcers, blood type mismatch, or iatrogenic injury, can be a HAC.
A long-term acute care hospital (LTACH), also known as a Long Term Care Hospital (LTCH), is a hospital specializing in treating patients requiring extended hospitalization. Hospitals specializing in long-term care have existed for decades in the form of sanatoriums for patients with tuberculosis and other chronic diseases. The modern hospital known as an LTACHs came into existence as a result of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999. The Act defines an LTACH as “a hospital which has an average inpatient length of stay of greater than 25 days.” Traditionally, LTACHs provide care for patients receiving prolonged mechanical ventilation.
Bundled payment, also known as episode-based payment, episode payment, episode-of-care payment, case rate, evidence-based case rate, global bundled payment, global payment, package pricing, or packaged pricing, is defined as the reimbursement of health care providers "on the basis of expected costs for clinically-defined episodes of care." It has been described as "a middle ground" between fee-for-service reimbursement and capitation, given that risk is shared between payer and provider. Bundled payments have been proposed in the health care reform debate in the United States as a strategy for reducing health care costs, especially during the Obama administration (2009–2016). Commercial payers have shown interest in bundled payments in order to reduce costs. In 2012, it was estimated that approximately one-third of the United States healthcare reimbursement used bundled methodology.
A prospective payment system (PPS) is a term used to refer to several payment methodologies for which means of determining insurance reimbursement is based on a predetermined payment regardless of the intensity of the actual service provided.
The Medicare Physician Group Practice (PGP) demonstration is Medicare's first physician pay-for-performance (P4P) initiative. The demonstration establishes incentives for quality improvement and cost efficiency. Ten large physician groups are participating in the demonstration, which started on April 1, 2005, and will run for 3 years. Previous funding arrangements, like the volume performance standard (VPS) and the sustainable growth rate (SGR) did not provide incentives to slow the growth of services. The Medicare PGP demonstration is an attempt to overcome these limitations.
The 340B Drug Discount Program is a US federal government program created in 1992 that requires drug manufacturers to provide outpatient drugs to eligible health care organizations and covered entities at significantly reduced prices. The intent of the program is to allow covered entities to "[s]tretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Maintaining services and lowering medication costs for patients is consistent with the purpose of the program, which is named for the section authorizing it in the Public Health Service Act (PHSA) It was enacted by Congress as part of a larger bill signed into law by President George HW Bush.
A hospital readmission is an episode when a patient who had been discharged from a hospital is admitted again within a specified time interval. Readmission rates have increasingly been used as an outcome measure in health services research and as a quality benchmark for health systems. Hospital readmission rates were formally included in reimbursement decisions for the Centers for Medicare and Medicaid Services (CMS) as part of the Patient Protection and Affordable Care Act (ACA) of 2010, which penalizes health systems with higher than expected readmission rates through the Hospital Readmission Reduction Program. Since the inception of this penalty, there have been other programs that have been introduced, with the aim to decrease hospital readmission. The Community Based Care Transition Program, Independence At Home Demonstration Program, and Bundled Payments for Care Improvement Initiative are all examples of these programs. While many time frames have been used historically, the most common time frame is within 30 days of discharge, and this is what CMS uses.
