Inpatient Transfer Episodes Among Aged Medicare Beneficiaries

The Ambulatory Patient Groups (APGs) are a patient classification system that was developed to be used as the basis of a prospective payment system (PPS) for the facility cost of outpatient care. This article will review the key characteristics of a patient classification system for ambulatory care, describe the APG development process, and describe a payment model based on the APGs. We present the results of simulating the use of APGs in a prospective payment system, and conclude with a discussion of the implementation issues associated with an outpatient PPS.