Reader Question: APC Modifications

Question: After all the commotion caused by the original ambulatory payment classification (APC) rules, the Clinton administration said it would make some changes. What kind of modifications can we expect?

New York Subscriber

Answer: The Clinton administration has stated that it will use its administrative powers to revise the APC final rule in several ways, including:

1. Delay in the implementation of the volume-control mechanism for two years.

2. Eliminate the average hospital outpatient services payment reduction of 5.7 percent projected to occur under APCs.

3. Moderate payment reduction for rural, cancer and other hospitals that would have suffered large reimbursement losses under the proposed rule.

4. Delay implementation of APCs for cancer hospitals until more data are collected.

5. Make technical refinements to the APC system based on numerous public comments plus the detailed comments of the Medicare Payment Advisory Committee. An independent, outside contractor has been hired to obtain data regarding the costs of chemotherapy drugs.

6. Permit cost-based APCs for certain new technologies.

7. Create additional APCs for certain high-cost drugs.

8. Create separate APCs for blood and blood products.

9. Eliminate use of diagnosis codes to determine APC payments for medical outpatient visits.

10. Require the Health Care Financing Administration (HCFA) to issue a regulation outlining a process under which the secretary of Health and Human Services (HHS) would accept and use certain data provided by outside organizations to supplement data from HHS and the American Medical Association.


- Published on 2000-05-01