This study addresses preliminary issues related to the development of a Medicare hospital outpatient department (OPD) prospective payment system based on ambulatory patient groups (APGs). It is limited to services provided in hospital outpatient departments and includes three tasks: classification of OPD according to the APG system; derivation of weights for each APG based on facility costs; and assessment of the financial impact on various groups of hospitals resulting from changing to an APG-based system. Included is a description of the characteristics of both a generic prospective payment system and of APGs.
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