ambulatory visits, disease management, fee for service, managed care, prospective payment



  1. Goldfield, Norbert MD
  2. Averill, Richard MS
  3. Eisenhandler, Jon PhD
  4. Grant, Thelma RRA


The Ambulatory Patient Groups (APGs) are a patient classification system that was designed to be used as the basis of an Outpatient Prospective Payment System (OPPS). Although 6 major non-Medicare payers had implemented an APG-based OPPS between 1995 and 2000, the implementation of the Ambulatory Payment Classification (APC)-based Medicare OPPS shifted the focus of outpatient payment reform among payers to APC-based systems. Unfortunately, the APC OPPS is not really a prospective payment system and has become essentially a variant of a fee-for-service system. As a result, most major non-Medicare payers have rejected APCs as a model for outpatient payment reform and a renewed interest in the original APG OPPS design has occurred. This article reviews the basic components of an OPPS, compares and contrasts an APG- and APC-based OPPS, describes the differences between APG, Version 2.0, and APG, Version 3.0, and summarizes the key policy decisions payers will need to make in implementing an OPPS.