Notably, many HCPCS codes are not assigned to any APC. Thus, one APC may be applied to numerous HCPCS codes, whereas any individual HCPCS code can be assigned to only one APC. The services assigned to any APC are considered by CMS to be clinically similar and similar in terms of the resources required to provide each service. Healthcare Common Procedure Coding System codes (HCPCS codes) are assigned to APCs by CMS, and these assignments are updated at least annually (HCPCS code sets include the full Current Procedural Terminology code set). The hospital outpatient prospective payment system (OPPS) in place today classifies all hospital outpatient services into Ambulatory Payment Classifications (APCs). The main intent was to provide CMS with a system to better predict and manage program expenditures by assigning fixed payment amounts to groups of services similarly to the inpatient prospective payment system (based on Diagnosis-Related Groups). Further modifications were granted under the Balanced Budget Refinement Act of 1999. The Balanced Budget Act of 1997 granted authority to the Centers for Medicare and Medicaid Services (CMS) to establish a prospective payment system for hospital outpatient services.
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