The Ambulatory Payment Classification
(APC) system has finally arrived, and hospitals could be in for a real shock,
according to the premiere issue of a new monthly publication offering guidance
on the newly enacted Medicare payment scheme for outpatient care.
According to the cover story in the August 2000 issue of APC Advisor,
official government projections regarding the impact of Medicare's new
hospital outpatient prospective payment system may be misleadingly gentle.
The Carolinas HealthCare System in Charlotte, NC, for example, says it was
"shocked" at the losses predicted by its own internal readiness assessment for the switch to APCs, which form the cornerstone of the new system that took effect August 1. In that assessment, losses higher than the official
predictions from the federal Health Care Financing Administration occurred in
almost every clinical setting. In fact, the Carolinas system found that it
would lose a whopping 50% of its outpatient reimbursement under APCs, while
HCFA has predicted hospitals will actually see a net gain of 5%.
Hospital officials warn that facilities across the country are woefully
underprepared for APCs and must take steps immediately to minimize the impact
of the complex new payment system. APC Advisor describes in detail the
measures taken by the Carolinas system to analyze the system's true impact, as
well as the sweeping financial and operational changes it is planning for the
transition. "The switch to APCs promises to be at least as far-reaching as
the conversion to inpatient prospective payment almost 20 years ago," says APC Advisor publisher David Schwartz. "This report suggests hospitals that don't make changes immediately will fare far worse than HCFA projections estimate.
The winners under APCs will be those who react quickly and learn the
incentives built into the new system.
Physician groups say APCs
are a threat to hospital-based chest pain centers and the state-of-the-
art care they provide. The new payment system changes reimbursement for thousands of chest pain centers across the country.
APCs are old hat for some providers and payers. They are the
participants in a voluntary Medicaid outpatient reimbursement program
similar to the Medicare's new system. A major hospital in Washington
state and administrators in Massachusetts' Medicaid program recount how
they adjusted to outpatient prospective payment, what worked, what
didn't, and the long-term benefits of the transition.
The long term impact of the APCs remains to be seen. Those hospital administrators interested in free issues of APC advisor can get them by sending an e-mail with their full mailing address to firstname.lastname@example.org , calling 800-597-6300 or 404-607-9500, or faxing a request to 404-607-0095.