What is an APC in Medicare payment terminology?

• A. Ambulatory Care Classification
• B. Ambulatory Procedure Code
• C. Ambulatory Payment Classification; a group used to pay hospital outpatient services under OPPS.
• D. Ambulatory Pricing Category

Answer: (C)

The concept tested is how Medicare pays for hospital outpatient services by grouping those services into Ambulatory Payment Classifications to determine a fixed payment under the Outpatient Prospective Payment System. APCs categorize outpatient procedures and related services that are clinically similar and require similar resources, so each encounter is assigned to an APC and paid a standardized rate. This system helps standardize reimbursements and control costs, with adjustments for geography and, in some cases, additional payments for drugs or devices billed separately. The other terms don’t reflect Medicare’s actual terminology or how payments are determined for outpatient services.