APCs Will Affect the Way Facilities Do Business

Nobody knows exactly what federal ambulatory payment classification (APC) regulations will dictate when they finally go into effect in July, but that hasnt stopped the healthcare industry from scrambling to prepare for the changes required by this forthcoming outpatient care payment system.

Essentially, were taking the thousands of HCPCS codes used for outpatient services and consolidating them into a smaller group of 346 APCs, says Sue Mote, CPC, director of operations and reimbursement consulting services for the Healthcare Practice Enhancement Network Inc., a healthcare management consulting firm in Los Angeles.

APCs take into consideration every aspect of outpatient care. Usage of medical supplies, staffing efficiency and several other operational costs become more important to facilities under this system, Mote says. These are the sort of things that have to be scrutinized more closely if providers dont want to lose their shirts.

Caral Edelberg, CPC, CCS-P, president of Medical Management Resources Inc., an emergency department coding consulting firm in Jacksonville, Fla., reports that she sees medical facilities across the country getting increasingly concerned about APCs. They should be, she says, because the final APC regulations are scheduled to be released soon and take effect as early as July.

Do APCs solve a problem or create one? That depends on whos talking, Mote says. These codes are expected to reduce overall Medicare payments by at least 5.7 percent, according to the Health Care Financing Administration (HCFA). But many industry and professional organizations believe HCFAs estimate of facility revenue loss is far too low.

Cooperative Billing Required

APCs will require hospitals, outpatient facilities and even physicians to code and bill in an entirely different way from traditional procedures. Today, if a Medicare patient walks into an ambulatory clinic for some tests then walks across the street to the hospital for an outpatient procedure, he can receive a number of bills, one from each department involved in his treatment.

But under APCs, all the bills have to be consolidated into one if the facilities are commonly owned, Mote says. That means that no one can be paidindeed the bill cannot even be submitted for reimbursementuntil every department and physician submits their portions of the entire bill to central billing, and that bill is itemized and correctly coded. This itemization and consolidation requirement puts tremendous pressure on the facility to keep track of each department and rush them along in their billing process.
Obviously, the new rules will require all departments to work closer together on billing, Mote says.

Other Caution Areas

Cooperative billing represents only one of the problems facilities will face when APC regulations take effect. Others include:

Short Phase-in Time. When the government switched to the Medicare Fee Schedule, the healthcare industry had five years to adjust, Edelberg says. [...]

- Published on 2000-04-01