FACT SHEET

Background: The Balanced Budget Refinement Act of 1999 amended the Social Security Act to require the Secretary of the Department of Health and Human Services to consult with an Advisory Panel on Ambulatory Payment Classification Groups (APCs) used in Medicare's prospective payment system for hospital outpatient services (OPPS). This new system, implemented on August 1, is designed to promote efficiency in service delivery and save money for beneficiaries and taxpayers. The panel will help to ensure seniors and disabled Americans receive appropriate outpatient care by making recommendations on how Medicare classifies these services when it determines payment rates under the APCs. APCs are groupings of services and procedures that are clinically comparable and use similar resources. The APC Panel, created in adherence with the Federal Advisory Committee Act (FACA), is being established to review the clinical integrity of the APCs and their weights. The Panel's advice will be considered by HCFA as it prepares the annual proposed rule updating the OPPS to be published in the spring. The final OPPS update rule for the following calendar year is scheduled to be published in late fall. The Charter for the Panel was approved by the Secretary on November 21, 2000.

The APC Advisory Panel

The Advisory Panel on Ambulatory Payment Classification Groups will meet early in the first quarter of each year. Areas of discussion may include:

• The determination whether selected procedures are similar both clinically and in terms of resource use;
  
  
• The assignment of new Current Procedural Terminology (CPT) codes to existing APCs;
  
  
• The reassignment of CPT codes to different APCs; and
  
  
• The reconfiguring of existing APCs into new APCs.

The Panel will provide technical advice and will concentrate on operational aspects of the APC system. It is not a policy-making body, and will not make policy recommendations. The Panel must consult with entities and organizations, such as the medical device and drug industries, with expert technical knowledge of the components of the APCs.

The Panel will consist of up to 15 members who must be representatives of Medicare hospitals (including Community Mental Health Centers) that are subject to the outpatient PPS. The members must have technical and/or clinical expertise in any of the following areas:

• Hospital payment systems;
  
  
• Hospital medical care delivery systems;
  
  
• Outpatient payment requirements;
  
  
• Ambulatory payment classification groups;
  
  
• Use of, and payment for, drugs and medical devices in an outpatient setting;
  
  
• Provision of, and payment for, partial hospitalization services; and
  
  
• Any other relevant expertise.

A panel member is not required to possess expertise in all of these areas, but must have a minimum of five years experience and be employed full-time in his or her area of expertise. HCFA has a special interest in ensuring that women, minorities and the physically challenged are adequately represented on the Panel.

Editor's Note: HCFA is currently soliciting nominations for individuals to serve on the APC Advisory Panel. The nomination procedure is discussed in the Federal Register notice, which can be found in the December 5 Federal Register or online at http://www.hcfa.gov/.