What is the difference between IPPS and OPPS in Medicare payment systems?

• A. IPPS pays inpatient hospital services; OPPS pays most outpatient hospital services; both use DRG and APC groupings.
• B. IPPS pays outpatient services; OPPS pays inpatient services.
• C. IPPS uses APCs; OPPS uses DRGs.
• D. IPPS and OPPS are the same.

Answer: (A)

In Medicare payment systems, inpatient care is paid under the Inpatient Prospective Payment System, which uses Diagnosis-Related Groups to determine a fixed payment for an entire hospital stay. Outpatient care is paid under the Outpatient Prospective Payment System, which uses Ambulatory Payment Classifications to pay for individual outpatient procedures and services. The key difference is the setting (inpatient versus outpatient) and the grouping method (DRGs for inpatient stays, APCs for outpatient services). The statement that both systems use DRG and APC groupings isn’t accurate, since DRGs apply to inpatient stays and APCs apply to outpatient services.