Knowledge base

Ambulatory Payment Classification (APC) Fraud

Similar to DRG payment method (applicable to hospital inpatients only), APC’s are how CMS classified procedures, evaluation and management services, drugs and devices in hospital outpatient departments, to arrive at appropriate payment for outpatient care. CMS divided the services and products into approximately 750 ambulatory payment classifications. The APCs are groups of items and services that are clinically similar and use comparable resources. Within each APC, CMS bundles integral services and items with the primary service. For example, a surgical procedure includes operating and recovery as well as services, anesthesia, and surgical supplies. APCs like DRGs, are susceptible to upcoding, which can be the basis for a qui tam lawsuit. In addition, fraud is present when APC’s are unbundled for multiple related procedures, repeat procedures, and global surgeries.

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