Diagnosis-Related Groups (DRGs) and Ambulatory Payment Classifications (APCs) are used for which purposes?

• A. APCs used for inpatient; DRGs for outpatient
• B. APCs used for physician services only; DRGs for hospital services
• C. DRGs are used for inpatient reimbursement, while APCs are used for outpatient reimbursement
• D. APCs and DRGs are identical in function

Answer: (C)

DRGs and APCs are resource-based payment groupers used by Medicare to standardize how hospitals are paid, but they apply to different settings. Diagnosis-Related Groups categorize inpatient stays into groups with similar expected hospital resource use, and payments under the inpatient prospective payment system are made as a fixed amount per admission based on the DRG. Ambulatory Payment Classifications classify outpatient services in hospital outpatient departments and ambulatory surgical centers, with payments determined per outpatient encounter under the outpatient prospective payment system. So DRGs correspond to inpatient reimbursement, while APCs correspond to outpatient reimbursement, making that pairing the correct description of their purposes.