title: Calculating pass-through and outlier payments under APCs.
abstract: Medicare's outpatient prospective payment system is based on ambulatory payment classifications (APCs) that group services into categories for payment. The relative weight of each APC is based on the median operating and capital cost of the services within the group based on hospital outpatient claims data for 1996. These data, however, do not accurately reflect the cost of innovative medical devices, drugs, and biologicals currently in use. To account for these developments, the Balanced Budget Refinement Act of 1999 (BBRA) established the transitional pass-through payment system to provide additional amounts above the applicable APC rate for innovative medical devices, drugs, and biologicals. The BBRA also established a cost-outlier adjustment. Successfully calculating payments for pass-through and outlier devices requires that financial managers have a thorough knowledge of the medical devices, drugs, and biologicals being used in their outpatient surgery departments.
authors.affiliation: Medtronic, Monsey, New York, USA. martin.gold@medtronic.com
authors.forename: M
authors.initials: M
authors.lastname: Gold
authors.forename: S
authors.initials: S
authors.lastname: Snodgrass
mesh_terms: D000553:Ambulatory Care / Q000145:classification* / Q000191:economics; D002017:Budgets / Q000331:legislation & jurisprudence; D002201:Capital Expenditures / Q000706:statistics & numerical data; D014487:Centers for Medicare and Medicaid Services, U.S.; D004865:Equipment and Supplies, Hospital / Q000191:economics; D017721:Hospital Costs / Q000706:statistics & numerical data; D006801:Humans; D006278:Medicare / Q000331:legislation & jurisprudence*; D016311:Outliers, DRG / Q000191:economics*; D010044:Outpatient Clinics, Hospital / Q000191:economics*; D011445:Prospective Payment System / Q000331:legislation & jurisprudence*; D014481:United States