The dynamic of the outpatient prospective payment system within the hospital setting.

Medicare payment has always been based largely on reasonable cost-based related for outpatient services except for certain other services that are paid according to a fee schedule developed by Medicare. August 1, 2000, marked the end of an era. Hospital providers will no longer be reimbursed based on reasonable cost but payment will be based on ambulatory payment classification (APC). APC is really a type of fee schedule following the diagnosis-related group concept but limits payment for hospital outpatient services for Medicare recipients. The complexities of this new payment methodology and the potential shortfall require an integrated disciplinary approach.