Ambulatory Patient Groups, Version 3.0—A Classification System for Payment of Ambulatory Visits

Abstract

The Ambulatory Patient Groups (APGs) are a patient classification system that was designed to be used as the basis of an Outpatient Prospective Payment System (OPPS). Although 6 major non-Medicare payers had implemented an APG-based OPPS between 1995 and 2000, the implementation of the Ambulatory Payment Classification (APC)-based Medicare OPPS shifted the focus of outpatient payment reform among payers to APC-based systems. Unfortunately, the APC OPPS is not really a prospective payment system and has become essentially a variant of a fee-for-service system. As a result, most major non-Medicare payers have rejected APCs as a model for outpatient payment reform and a renewed interest in the original APG OPPS design has occurred. This article reviews the basic components of an OPPS, compares and contrasts an APG- and APC-based OPPS, describes the differences between APG, Version 2.0, and APG, Version 3.0, and summarizes the key policy decisions payers will need to make in implementing an OPPS.