Thursday, August 16, 2018

What is APG paymnet - how its calculated. type and classification



The purpose of this document is to provide Medicaid policy and billing guidance to Article 28 providers billing under the Ambulatory Patient Groups Payment methodology to the extent this methodology is applicable to hospital-based outpatient, ambulatory surgery, and emergency departments, and to free-standing diagnostic and treatment centers and free-standing ambulatory surgery centers.


The APG payment methodology is applicable to outpatient, ambulatory surgery and emergency department services provided by general hospitals and to ambulatory care services provided by diagnostic and treatment centers and free-standing ambulatory surgery centers.

The APG payment methodology is not applicable to:
** services provided outside of a facility’s licensure under Article 28 of the Public Health Law (e.g. APGs are not currently applicable to services certified under the Mental Hygiene Law)
** capitated payments made on behalf of Medicaid managed care or Family Health Plus enrollees;
** payment for Ordered Ambulatory services
** payment for physicians’ services in hospital settings billed using the Physician Fee Schedule;
** payment to Federally Qualified Health Centers (FQHCs), except when the FQHC has voluntarily agreed to participate in the APG reimbursement system, or;
** payment for long term care, home care, personal care.


Both hospital-based ambulatory surgery and emergency department services received 100% APG payment with the implementation of the APG reimbursement methodology. However, APG reimbursement for hospital  outpatient departments, diagnostic and treatment centers and free-standing ambulatory surgery centers is phased-in as required by law. In the initial phase of blending, reimbursement for each individual visit is based on 25% of the full amount that the APG methodology would calculate for the visit (based on coded procedures and diagnoses) and 75% of a provider-specific existing payment for the blend amount. The existing payment used for blending purposes is based on a provider’s average per visit reimbursement for services moving to APGs for calendar year 2007.

The APG portion of the blend increases on December 1, 2009, January 1, 2011,and January 1, 2012 according to the following schedule:

Hospital Outpatient Department December 1, 2008 Starting Dec 1, 2008, 25% of payment will be based on APGs. The percentage will increase to 50% on December 1, 2009; to 75% on Jan 1, 2011; and to 100% on Jan 1, 2012.

Hospital Emergency Room January 1, 2009 100% of payment will be based on APGs starting Jan 1, 2009.

Hospital-Based Ambulatory Surgery December 1, 2008 100% of payment will be based on APGs starting Dec 1, 2008.

Free-standing Diagnostic and Treatment Center September 1, 2009 Starting on September 1, 2009, 25% of payment will be based on APGs. The percentage will increase to 50% on December 1, 2009; to 75% on Jan 1, 2011; and to 100% on Jan 1, 2012.

Free-standing Ambulatory Surgery September 1, 2009 Starting on September 1, 2009, 25% of payment will be based on APGs. The percentage will increase to 50% on December 1, 2009; to 75% on Jan 1, 2011; and to 100% on Jan 1, 2012.

When APGs are implemented in facilities licensed under the Mental Hygiene Law, free standing mental hygiene providers (not hospital based providers) will have an APG phase-in period that is distinct from the phase-in schedule for D&TC clinic services listed above. The variable blend percentages will be linked to the APG rate code.



As previously discussed, APGs are a patient classification system designed to pay providers based on the amount and type of resources used during a patient encounter. Patients in a given APG have similar clinical characteristics as well as similar resource use and cost. APGs require facilities to report all services provided during the patient encounter. Provider payments are directly related to the actual services provided based on patient diagnosis and the CPT/HCPCS codes reported on the Medicaid claim. Medical services requiring a higher level of professional and ancillary care are paid a higher rate than those of a lower intensity.

APG processing uses software that examines the procedure codes and any associated modifiers reported in each of a claim’s service lines and assigns each line an APG code, along with other relevant values (e.g. APG weights, packaging flags, discounting percentages, etc.). Each APG code carries a “weight” based on the group’s average cost, from which appropriate payment levels are established. The APG “weight” can be multiplied by a percentage to reduce or increase the weight, depending on the APG grouper’s evaluation of the service line, resulting in the service line’s final “weight.” For medical visits, the assignment of an APG is dependent on the ICD-9 Primary Diagnosis Code recorded on the claim.

There are a number of procedures (primarily pertaining to eyeglasses, mental hygiene services, rehabilitation therapies and hearing aids) which are assigned a procedure-based weight that is different from the APG weight. In the APG payment methodology, the procedure based weight overrides the APG weight. Additionally, if a procedure is assigned a procedure-based

weight it will pay even if it groups to a Never Pay APG. However, if the procedure groups to an “If Stand Alone Do Not Pay APG”, it will not pay if it is the only procedure on the claim or is accompanied by non-paying procedures. Discounting and consolidating logic will still occur where applicable. Some of the procedure-based weights also recognize units. For example, the physical therapy APG includes units based and non-units based procedures. The units based physical therapy procedures are assigned a procedure based weight that is different from the physical therapy APG weight. When coding a unit- based procedure, the number of units should also be reported on the claim. The procedure-based weight and the number of units are both used in the APG payment calculation for the units based procedure.

The “final weight” for a given visit is multiplied by a provider-associated base rate as part of the APG payment calculation. For hospital outpatient departments and diagnostic and treatment centers, the APG payment is “blended” with a historical weighted average payment of the provider’s pre-APG rates to arrive at the final payment amount. A single claim can be assigned one or more APG values, each of which carries its own “weight,” depending on the service line procedure codes, modifiers, and in some cases, diagnosis codes. The eMedNY system will use the EAPG Grouper/Pricer for processing institutional outpatient claims upon the effective dates of APG implementation as identified in section 1.5 of this document. Affected providers are required to use new rate codes on and after those effective dates. Use of the new rate codes results in payments for services based on the APG classification and payment rules. When a visit consists entirely of “no capital add-on APGs” or “no capital add on procedures” a capital add-on payment is not included in the final APG payment for the visit.

For a complete list of “no capital add-on APGs and procedures” please visit:


The EAPG Grouper/Pricer maps CPT and HCPCS procedure codes and ICD-9 diagnosis codes reported on a claim to APGs to define the ambulatory visit. Multiple APGs may be assigned to a visit. The four primary types of APGs are described below.

Significant Procedures: A procedure/service which constitutes the reason for the visit and dominates the time and resources expended during the visit. (Examples: excision of skin lesion, stress test, insertion of a central venous catheter, treating fractured limb)

Medical Visits: A visit during which a patient receives medical treatment but does not have a significant procedure performed. Evaluation and management codes are assigned to one of the medical visit APGs based on the primary diagnosis reported on the claim. (Examples: follow-up visit for patient with congestive heart failure, chronic obstructive pulmonary disease, hypertension)

Ancillary Tests and Procedures: A test or procedure ordered by the primary physician to assist in patient diagnosis or treatment. (Examples: immunizations, plain film x-rays, laboratory tests) Incidental Procedures: An integral part of a medical visit usually associated with professional services being given to the recipient. (Example: range of motion measurements)


In the APG classification system, the patient is described by a list of APGs that corresponds to services provided to the patient. The significant procedure (rather than diagnosis) is the initial classification variable. Procedures that could be performed on an ambulatory basis are categorized as either significant procedures or ancillary services. Patients who undergo a significant procedure are assigned to a significant procedure APG on the basis of the CPT code that describes the precise significant procedure. Patients receiving medical treatment that does not involve a significant procedure are assigned to a medical APG based on the ICD-9 diagnosis code. In some instances, a patient may receive a significant procedure and a medical visit, in which case the visit would be assigned to a significant procedure APG. Under the default APG logic, the procedure would be paid at the line level and the medical visit payment would be included (packaged) in the payment for the significant procedure. A patient who neither received medical treatment nor underwent a significant procedure but had an ancillary service performed would be assigned an ancillary service APG. Patients with any significant procedures or therapies are assigned to one or more significant procedure APGs.

If there are no significant procedures present and there is a medical visit (Evaluation and Management CPT code reported), the patient is assigned to a medical visit APG. If there is neither a significant procedure nor a medical visit code, but there are ancillary test(s) or procedure(s) present, then the patient is assigned one or more ancillary APGs.

If there is no significant procedure CPT code, medical visit (evaluation and management CPT) code or ancillary code, the claim is considered an error.

The figure below provides an overview of the APG assignment logic as discussed above. Effective January 1, 2010, the EAPG grouper logic was revised to recognize a list of significant procedures with which medical visits will no longer package. Medical visits will no longer package with: the more significant ancillaries; dental procedures; physical, speech and occupational therapy; and counseling services. When certain significant procedures are performed on the same day as a medical visit, no packaging would occur and payments would be received by the provider for both the medical visit and significant procedure at the line level.

For a complete list of “significant procedures with which medical visits do not package,” please visit:

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